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Wheels of Fortune

Car ads, like car salesmen, run the gamut from sleek to tacky. But the days of automakers' trumpeting huge "sell-a-thons" and 0% financing in brash TV ads are disappearing. Now Detroit and its global counterparts favor subtler enticements. These days, design is all. Market focus is key. Automotive companies are stressing new- model pizzazz, while sharpening their pitches to target age, gender, and geography. All of which, say media buyers, benefits cable networks and local affiliates.

What's driving the change?

For the past five years, auto-sales volume in the U.S. has consistently surpassed 16.5 million units, but 2003's 16.7 million sales volume was the lowest. Over-production has plagued the industry for years. Plus, the grinding economy and the incessant offers of 0% financing have eaten into the car companies' marketing budgets.

"Zero-percent financing is a root cause of a bigger problem, which is the enormous competition," says Haig Stoddard, manager, industry analysis, for, an industry research firm. "There are more companies competing for more segments of the market. That has led to overcapacity, which has led to various rebates and incentives. They have squeezed profits and made it hard for the automakers to make money."

As a result, auto-ad spending across the board is likely to remain flat for much of 2004, says Rino Scanzoni, president, broadcast division, WPP Group's Mediaedge:cia, New York. The agency's Irvine, Calif., office handles media for Ford's Land Rover and Jaguar. "Second quarter 2002 vs. second quarter 2001, auto-ad spending was up 17%," Scanzoni says. "Then, 2003 vs. 2002, it's flat. It's likely to stay that way, with broadcast spending probably heading downward." Other buyers agree, estimating that auto-ad spending on broadcast could be down 3%.

The pullback in ad spending is primarily on the domestic front and affecting broadcast networks, he says. Companies like GM and Ford are cutting back on national TV. The good news: That decline has been picked up by foreign carmakers, such as Nissan, Honda, and DaimlerChrysler, Scanzoni adds. Also, while national broadcast may be tilting south, local broadcast attracted greater ad dollars in January, reports TNS/CMR, which listed spot buying for autos up 4.5%.

But domestic automakers, with an eye on shrunken profits, have increasingly turned toward a non-broadcast option: cable and local advertising. Media buyers estimate that, as a category, carmakers are drawing 59% of their gross ratings points from cable. Its fragmented media landscape, along with better profiling of potential buyers, is inspiring a new set of creative and media choices for car companies and their ad agencies. Product lines are geared to distinctive age groups and different lifestyles. Cable, say ad buyers, should see a 5% rise in ad expenditures from automakers.

Cable's ascendancy, while a mantra for many media buyers, is contested by Chris Rohrs, president of the Television Bureau of Advertising. "Everyone agrees that the prices for national cable are lower vs. national broadcast, but, at the local level, that comparison is the direct opposite," he says. "Automakers are realizing how small the CPMs are." Still, he notes, consolidation within the cable industry could lead to greater efficiencies and a more assertive sales force.

Since driving sales is critical, car makers have launched a two-pronged attack. "The short term, which is taken by local dealers, is focused on the deal. That includes incentives, low monthly payments, special lease deals. It's price-oriented and transaction-oriented," says Tom Libby, director of industry analysis for the Troy, Mich.-based Power Information Network, an affiliate of J.D. Power & Associates. "The long-term view is taken by the parent company, which is building brand image among car buyers."

And brand message, says Patrick Heffernan, executive vp and Buick brand director for Interpublic Group's McCann-Erickson, Detroit, is why cable is an attractive sales choice. Cable networks' distinct identities—Lifetime, The Golf Channel, or MTV—help provide a platform for companies as they stress brand. Buickis preparing for the fall ad campaigns for two new offerings: the LaCrosse midsize car and the Terraza luxury SUV.

"You're always looking for a way to get your message through, and that's part of what inspired our relationship with Tiger Woods," Heffernan adds. "Network is still an essential part of securing a broad viewership, and Buick's LaCrosse will advertise heavily in network. But, with luxury brands, like the Terraza, you can go into cable more exclusively. It gives you the ability to better customize your message."

Tailoring the media message is also important to Kia Motors USA, which spends an estimated $270 million on advertising; 60% is devoted to TV. Kia has been using different cable outlets and local stations to market its Sedona. In partnership with its ad agency, Davidandgoliath, Los Angeles, the company has developed two distinct spots for the model: one aimed at men, the other at women, says Walter Anderson, Kia's vice president, marketing.

In the female-targeted spot, two women discuss the attributes of the Sedona while playing tennis. When told of the five-star safety rating and its other qualities, the woman listening to the pitch becomes distracted and is pelted by tennis balls. In the male version, two guys are hiding behind a log in a paintball match. After hearing about the Sedona's attributes, one absentmindedly lifts his head and is shot with colors. What's radical in both ads is that the car is barely seen.

"Everybody, with some exception for the pickup-truck advertising, is looking to do dual-audience, male/female targeting," says Dennis Donlin, president, General Motors Planworks, GM's dedicated media-planning operation and a division of the Publicis Groupe-owned Starcom MediaVest Group.

The key to dual-audience targeting is subtlety, Kia's Anderson points out. "If you market a vehicle to women, you don't market it as a woman's car."

Consider GM's current Hummer spot "Metal," created by Boston's Modernista!. A professionally dressed woman is driving all over a major city, with the tagline "Slip into something … a little more metal." The spot exudes confidence and comfort. Says Donlin, "There are no more mom mobiles in auto ads."

There are also no more unbreakable rules—advertising or marketing. "Now a single commercial pod can have two car ads in it, sometimes three, and often back to back," says John Crosson, president of Grey Worldwide LA. "The challenge to stand out is immense. Creative work needs to be distinct, and engage on specific points. The bar has been raised."