AutoNation tests dual strategy in Florida

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AutoNation, which sent shock waves through the auto industry with its rapid-fire growth, is introducing a new strategy in a $35 million effort breaking July 13 in South Florida.

The multimedia campaign attempts to do two jobs: build AutoNation as a national online brand while also supporting regional dealer brands. In the past, AutoNation, which operates more than 400 new-car franchises in 19 states, built the brands regionally and local dealerships handled their own advertising.

"This is our first step in defining AutoNation.com and set out our strategy to build our local-market brand names with common creative," said Mike Jackson, who joined AutoNation last fall as CEO from Mercedes-Benz USA, where he held the same title.

Dealer brand names in the new push will vary by market. Mike Maroone, who once owned nine of the 30 stores the marketer operates in South Florida, will be the brand name and appear in TV commercials in his region.

LEVERAGING DOMINANT NAME

Although AutoNation has 25% of the market in that area of Florida, dealerships are marketed under various names. The new tactic lets AutoNation leverage its size to establish one dominant name, Mr. Jackson said.

Zimmerman & Partners, Fort Lauderdale, handles the Sunshine State campaign.

The effort will move to Tampa and Denver later this summer, and Mr. Jackson said he'll evaluate results in the three markets before moving further.

Five or six ad agencies, which he said handle dealers in other areas, would lose the local accounts if the common ad campaign is taken to all markets. They include Pinnacle Advertising, Pensacola, Fla., which has the northeast U.S., and Maron & Davis, Encino, Calif., which has the Los Angeles area.

LOCAL LEVEL HOLDS BRAND VALUE

AutoNation debuted as a chain of used-car megastores in the late 1990s under parent Republic Industries. But the marketer exited that unprofitable business in January and has either closed or changed the 37 superstores into new-car stores. Republic Industries was dropped as the corporate name in favor of AutoNation in April 1999.

Consultant Todd Berko, partner at car dealer consultancy Bel Air Partners, said AutoNation "is finding out car retailing is a local business." He added, "There's more brand value at the local level with a name known to the customer for decades than trying to introduce a new brand name."

Zimmerman created seven TV commercials for the Florida effort, filmed in Los Angeles with non-union actors. The media buy includes outdoor, print, radio and the Web. Jordan Zimmerman, agency chairman, said the executions replace AutoNation's fractured marketing efforts and give its advertising a consistent look in all markets and on the Web.

NEW LOGO, WEB URL

The humorous spots have common threads to carry brand recognition further. The voice-over says, "Do you need a car? We'll show you the way." The commercials prominently feature a new logo--an arrow inside a yellow box--representing an button on AutoNation's Web site (autonation.com). It replaces the previous logo, a green road sign. The word "direct" in the previous Web URL, autonationdirect.com, which went live a year ago, also is gone.

In one commercial, a proud young man is horrified when his car gets smashed in a car wash. In another, a man leaving a sporting event early gets his vehicle overturned by rambunctious fans when the home team wins in the final second.

In Tampa, Autoway is the brand. There is no dealer spokesman, so animation will be used in the final seven seconds of the spot. In Denver, former Broncos quarterback John Elway, who sold his stores to AutoNation, is the brand and he will appear in the final 7 seconds of the commercials.

BUDGET TRACKS '99 SPENDING

The chain advertised John Elway AutoNation USA in a major ad campaign last year from Hill, Holliday, Connors, Cosmopulos, Boston. The agency resigned the account last September. AdTeam, Miami, got the account last fall, and Zimmerman inherited it by acquiring the shop in April.

Mr. Jackson said his ad budget will be about the same as last year, when he said AutoNation spent more than $200 million in retail advertising. Competitive Media Reporting, however, pegged AutoNation's 1999 measured media spending at $121 million.

The public company reported first-quarter 2000 operating income of $115.5 million, up more than 24% from a year ago. Revenue rose 15% to $5.23 billion compared to the first quarter of 1999. The tallies exclude charges related to AutoNation's closing of its used-car superstores and tax-free spinoff of its car rental operations.

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