Ad SpendingDrives Kia Sales

Kia's commercials, featuring hamsters, sock monkeys and the characters from Yo Gabba Gabba, have gotten a lot of attention. Airing in the Super Bowl doesn’t hurt when you’re a relatively new automaker trying to overhaul your image and introduce new models. Boosting ad spending has helped. Kia’s sales were up 9.8% in 2009, when other automakers saw sales drop 21.2%. This year, Kia is up 16.8%. Michael Sprague, Kia chief marketing officer, talked with B&C Business Editor Jon Lafayette about the company’s approach to growing its business.

What is Kia’s marketing message? What do you want consumers to think of when they hear the brand name?
Some of our initial products in the late ‘90s weren’t very well received from a quality standpoint. Some of that perception continues to kind of drag us down a bit. In the last two years we’ve introduced seven new products, and each one of the products is getting better and better. My job is, for those consumers who had a poor perception of the Kia brand, help change that perception. For the consumers who weren’t well aware of the brand or had no perception of the brand, help form that perception as a brand of coolly designed products with great safety features, innovative and usable technologies, fuel efficient, and offering great value.

What role does television play?
We use television to build reach. It’s still the most effective way to reach a large audience. And that’s why we went into the Super Bowl last year with our Sorrento campaign. It was the biggest launch ever for us as a brand. We had a 60-second ad and reached 110 million people to showcase this all-new product that was being built in America. We are also in the Super Bowl for 2011. Our feature vehicle there will be our all-new Optima.

With the Super Bowl ads, I assume your spending is up yearover- year?
Yes, that’s a fair statement. In 2009, when a lot of companies were pulling back their media, we actually took a different approach and invested more in 2009. We looked at it as an opportunity to talk about our new product and build our awareness in a time when people were looking for value. So the timing worked well. And we continued that strategy in 2010 as we were launching all of the new products.

You said part of your goal is to drive people to your Website, where they can get more information. Are you also doing more interactive and online advertising?
Absolutely. I would say that’s where we’re channeling more money as our budgets expand, and that’s simply because of the explosion in consumers going online, whether at their desktops, or their laptops or their iPads, or now through their mobile devices, their smartphones, etc. In 2011 we’ll spend even more money in mobile applications because our dealers tell us that consumers are coming into their lots with their mobile devices. They used to come loaded with paper comparisons, and now they’ve got it all in their mobile devices.

That’s our strategy: Build the awareness, drive traffic to our Website in hopes that the consumers will either visit a dealer in person or make contact with a dealer through what we call our electronic leads program, where they’ll go on and configure a product and then send a notice to a dealer to say, hey I’m interested in this product and I’d like to learn more about it electronically or through a phone call.

Who is responsible for making sure that all these media work together?
That would be my job and my team’s job. I also have PR responsibility as well, which for me is very important because we want to make sure the messaging is consistent every step of the way, at every point a consumer could potentially see the brand or read about the brand or connect with the brand.

Are media vendors doing all they can to make this easy for you?
That’s a loaded question, considering who your audience is.

That’s the point.
Everybody has something to sell. As a marketer, I’m looking for companies that can come in and show me integrated plans, because otherwise I’ve got to put all the pieces together. But if somebody can come in and say, OK, here is an opportunity in television, which then flows through to print, which flows through to online or digital or maybe an experiential component, that just makes my life so much easier. And from a creative standpoint, I can give my creative agency one directive. Some of the companies [that can do this], maybe they’re a little too big and bureaucratic, so I still want to listen to the start-ups, the more aggressive companies who sometimes have cool and innovative ideas.

What’s the coolest thing someone has brought into your office lately in terms of a media or media technology?
Earlier this year, we were the first automotive advertiser on Zinio; it was the online magazine publication. It was basically taking a magazine and putting it online and giving consumers access to it digitally. From an advertising standpoint, it allowed me to add more content. It was no longer a printed piece of paper where somebody saw my ad—they could click on it and learn more, and I could have other content. I felt that that was really cool. The iPad we were approached on, but from a cost standpoint it wasn’t effective for us.

But some of the stuff people are doing on the gaming side is pretty cool for us, particularly if we are targeting Gen Y with some of our products. Those are some of the things that have been pretty cool for us.

Kia's introduced a lot of new models in the past few years. Is that changing what the brand stands for?
In the late ‘90s, early 2000s, we were basically a fuel-efficient, low-cost value brand and now we're offering so much more.

The recession has actually helped me a great deal because consumers were shifting from some of the more premium or ostentatious brands to value brands. And just as I was going into this new product cadence, and it started with the Soul back in March of 2009, three months later we followed up with the Forte, which is a compact sedan, so for your reference it competes with the Ford Focus or the Toyota Corolla, or the Honda Civic. We then came out with a two-door version of that called the Forte Koupe, Koupe spelled with a K just to be unique and whimsical, follow that up with a new Sorrento crossover, which was the first vehicle built in our first manufacturing plant down in West Point, Georgia. That was the vehicle that we featured in our Super Bowl spots in 2010, which was the first time that we were in the Super Bowl.

We just launched the all new Sportage crossover; that vehicle competes with the Ford Escape, the Mercury Mariner, the CRV, and then we're now launching our all new Optima, in the sedan segment, the Camry, the Accords, the Ford Fusions. It's the largest car segment at 1.8 million this year and it's the first time we're going to offer a gasoline direct-injection engine, a turbo and our first hybrid.

We know that a lot of consumers wouldn't consider us because we didn't offer a hybrid. They may not want a hybrid, but they wanted to deal with a company that is environmentally conscious and by offering a hybrid within our portfolio, it now gets us on those people's shopping lists.

Which consumer segment are you trying to reach through television?
For each individual vehicle, we have a target customer, a media target, and so we use television to reach. So for the Soul it was Gen Y. So we spent a lot of time in cable, MTV, those are shows that reach Gen Y more effectively than say something on the networks. We were on the networks, but not as much as we were on cable.

For Sorrento, it was more network because of who the target customer was that we were going after.

Who was that customer?
For that customer they were a couple who were either starting a family or has one or two young children. The vehicle is a crossover so it was available in a five-passenger or seven-passenger configuration. It was people who probably had a compact car or mid-size sedan but needed more cargo capacity. They didn't need a vehicle with towing capacity, because that just didn't fit their lifestyle, or needed space for baby seats and all the stuff that came with that stage of life.

How do you figure out how to reach those target audiences?
We work very closely with our media agencies. We work with a company called Notion, which works as an aggregator on behalf of us, the Kia brand, and then we have a sister brand, Innocean, in the U.S. It's Hyundai. Hyundai and Kia are two separate and distinct companies here in the U.S. I don't know anything about their plans, they don't know anything about mine. But in media buying opportunities, we've consolidated our media through Innocean. They work with Initiaitve Plus. They act as the media buying agency, Innocean works as sort of a strategic advisor and balances the media buying between the two companies. They know what my plans are, what my objectives are, they know what Hyundai's are and then they go and work with Initiative to say OK, from a media buying standpoint, this is the total budget, here's Kia's portion, here's Hyundai's portion. So we work closely with Innocean and Initiaitve. They are involved in our strategic planning, they know what our plans are for the next two to three years, so they know what the major vehicle launches are and they know what the core models are that we're going to focus on. And then, as we're going into the launch phase, they're briefed on who the target customer is from a demographic standpoint and they go off and develop a media target and then come back with plans and present those, and we fine tune them with them. So actually, it starts pretty early in the process in the product development cycle and when we develop our products we have a target customer in mind who we're going after-and its age, ethnicity, professional, all of the demographic pieces of it. We know these customers have needs from a vehicle, so we try to develop vehicles that fit those needs and their lifestyles. That's three to four years in advance. As we get closer to the launch we then bring in the media companies to say this is the product, this is who it's targeted toward, now let's go figure out how to market it to that customer from a media standpoint. That's probably about a year in advance.

You're looking to get some of that cool factor for your products. Are there any brands that you want to be associated with that are as cool as you want to be?
Our NBA sponsorship has been really cool for us and its helped build our awareness and helped elevate the brand. We have not only the league sponsorship, we have individual sponsorships with 13 teams throughout the U.S. and that's been very effective as well. The NBA is a brand.

Is that relationship with the NBA exploited through television?
We've got a number of different elements. We are the official automotive partner of the NBA. Our new Optima will be the official vehicle of the NBA, we're the presenting sponsor of tipoff week, which was late October, early November, this year we we've got sponsorship of the All-Star game, which in the past Toyota had that. We're a partner with the NBA in their charitable organization, NBA Care. It's not just television, there are other elements. It's in arena, it's digital, it's experiential, it's on the charitable side as well, our dealers are very involved, particularly in the markets where we have the team sponsorships. That is a really well-integrated partnership.

Anything else we should know about Kia?
We do consider ourselves a challenger brand here in the US. We have a 3% share right now. We've got our eyes on gaining a greater share of the U.S. automotive market in the coming years, so we do approach things differently, again through the way we do our advertising, it's not the typical car-on-road type of advertising. The car is always the star, but [where] there are other opportunities to be the first and to do something, we seize upon that. We think consumers, when they are shopping for a vehicle, think they do want to be entertained. They want a lot of the information, which we provide them, but in an engaging, fun manner.

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Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.