According to the Direct Marketing Association, automakers will spend $283 million on direct marketing this year, with $71 million of that in mailings. That's only $2 million more than they spent last year for all direct marketing and a mere $1 million more in mailings than 2000, the DMA said.
Several auto experts still predict this year could be the industry's third highest for vehicle sales following 2000's best ever sales. Yet, many auto marketers were beginning to see a slowdown in sales before the Sept. 11 attacks and trimmed ad budgets.
"When you cut back on marketing costs, you cut from the bottom up and direct marketing suffers proportionately," said Jim Sanfilippo, exec VP of consultancy AMCI and the former VP-marketing at Kia Motors America.
All is not bleak, however. Carmakers with crucial launches are stepping up direct marketing. And many automakers started to improve database capabilities last year.
For example, Nissan North America's Infiniti Division, Mazda North American Operations and Toyota Motor Sales USA's Lexus Division said they increased direct marketing spending this year vs. 2000. None would provide specifics, but they've all launched key vehicles this year.
Infiniti kicked off one of its largest direct efforts Oct. 12. It began sending 600,000 e-mails to current owners and prospects for a test-drive offer as part of the launch of the all-new I35 sedan. The car replaces its highest-volume I30. In November, the offer will be mailed to 400,000 others. Omnicom Group's Direct Partners worked with Infiniti's ad agency, Omnicom sibling TBWA Chiat/Day, Playa del Rey, Calif., for the program.
"Compared to traditional media, this provides us with the opportunity to give more specific information to prospects," said Brian O'Malley, corporate marketing manager at Infiniti. The non-owner recipients are "high quality prospects" who opted to get more I35 info at auto shows, the Web or a 1-800 number, he added.
Infiniti started increasing its use of e-mails for marketing in the last year. The timing is due to the marketer's enhanced development of its e-business capabilities, Mr. O'Malley said.
"Direct mail is absolutely not [going away]," said Jeff Scott, president of integrated account services at Interpublic Group of Cos.' Campbell-Ewald, Warren, Mich. His group's clients include General Motors Corp.'s Chevrolet, Continental Airlines and Farmers Insurance Group.
Direct has evolved into a convergence of paper and paperless. This "serious" convergence of paper mail with digital mail really began to proliferate among marketers in the past year to 18 months, he said. The movement was driven by the number of companies that completed upgrades to back-end systems and the proliferation of desktop computers in homes and offices. "What marketers are beginning to be most interested in are the data about you as a consumer, not the media," he said. Although initial contact with consumers can start a number of different ways, recipients pick which way to continue dialogues with marketers.
Mazda has brought its databases in-house. Outsiders had previously tracked 1-800 callers and other prospects.
The marketer recently mailed an offer for a six-month deferred payment to current Miata sports car owners. "Anytime we do any mailings, we look at our owner base and our hand-raisers because they're always our most lucrative," said Kristin Simmons, VP-marketing at Mazda. Independent Doner, Southfield, Mich., and its Doner Direct sibling handle.
Ms. Simmons cited the success of last year's direct program for a test drive of the Tribute, Mazda's first sport utility. That program from Doner Direct and Carlson Marketing Group generated nearly 25,000 vehicle sales. She said the effort helped sell other Mazda vehicles; more than 10,000 of the total weren't Tributes.
Earlier this year, Lexus formed an internal group dedicated to direct mail, previously handled by staff that also handled other matters. For the launch of its 2002 ES 300, Lexus dropped a direct mailing of 525,000 units to current owners in late September. They were asked if they'd like a brochure or DVD about the car. Ann Bybee, corporate manager of advertising, brand and product strategy at Lexus, said the brand got 2,500 early orders for the car, although not all were tied to the direct effort. Publicis Groupe's Team One Advertising, El Segundo, Calif., handles.
Dave Marold, auto practice leader-strategic direct marketing at Carlson Marketing Group, Troy, Mich, predicted an increase in automotive direct marketing next year. When the car market slips, "you have to squeeze more out of marketing dollars," he said. "With direct, you can really target those people likely to buy compared to mass media."