By Jill Anne Ciminillo

Special to TelevisionWeek

As advertisers from auto-makers to soda makers develop strategies to chase down the powerful and elusive Generation Y, the auto industry in particular is turning less often in recent years to television to market its wares.

Automakers, according to the Television Bureau of Advertising, are still the No. 1 advertiser category in terms of the top 100 markets for local broadcast TV, spending a total of $1.2 billion in the fourth quarter of 2004-up from year-earlier expenditures of $1.1 billion. Automakers outspent the next-largest category, government and organizations, by $689 million in the 2004 fourth quarter.

But just five years ago, automakers spent considerably more. According to TNS Media Intelligence/CMR, total TV advertising from the auto industry accounted for more than $3.2 billion in 2000; for 2004 it was a little more than $2.5 billion.

A big reason automakers are pulling back is that Gen Y doesn’t process messages the same way previous generations do, and getting through to Gen Y is crucial to the car business.

Gen Y (people born between 1980 and 1994) numbers about 63 million people in the United Startes. That makes them the second-largest generation after the baby boomers. And while the boomers are beginning to hit retirement, Gen Y is just beginning to hit its buying stride.

By 2010, Gen Y will account for 25 percent of light vehicle sales, Scion executives said. By 2020, the number will rise to 40 percent. According to research conducted by Scion, that means this generation will own 6.5 million vehicles in a 16 million-unit market.

Miles Johnson, Ford car public relations manager, said Gen Y not only has huge purchasing power, but also is a huge influencer. In fact, Ford Motor Co. executives say teens in the United States have spending power in excess of $172 billion per year and influence $565 billion of their parents’ spending. “A lot of companies recognize that,” said Dawn Ahmed, national marketing communications manager for Scion.

Network sources agree that advertisers are chasing this generation. They also acknowledge that media habits are changing. ABC, CBS and NBC declined to comment for this story.

Automakers, however, were vocal about what they’re doing to target this new generation. Almost all of them say their plans include less mainstream TV than in the past.

For example, Ford now spends less than 80 percent of its marketing dollars on traditional television and print advertising, Mr. Johnson said. Ten years ago, TV and print accounted for 98 percent of the company’s marketing budget.

The 20 percent Ford does not spend on the traditional media goes toward one-to-one customer relationship marketing, via the Internet, brand integration, sporting events, video games, music events and other efforts.

Other automakers are following suit. In March, Toyota Motor Co. signed a 2%BD;-year deal with the NBA/WNBA, which will give Toyota special signage during games, ad placement and the use of the NBA/WNBA logo in its marketing endeavors.

Last September, General Motors gave away 276 Pontiac G6s on “The Oprah Winfrey Show.”

Honda Motor Co. sponsors the “Honda Civic Tour,” which features the band Maroon 5 for 2005.



No Hard Sell

ATTIK, the brand communications group in charge of Scion’s creative direction, has been researching and marketing to youth for more than 20 years. Simon Needham, group creative director for ATTIK, said the key to capturing this particular market is to avoid the hard sell. He said you’ve got to put the information out there and then let Gen Y’ers choose whether they want to explore further.

Many automakers agree.

“[Members of Gen Y] don’t like in-your-face marketing,” Mr. Johnson said. “They want to find you on their own.”

As a result when Ford and several other automakers turn to TV, they often explore marketing opportunities other than the traditional 30-second spot, such as brand integration. Network executives confirmed that product placement is increasing with all advertisers, but they see it more as an enhancement to the traditional commercial, not a replacement.

Pontiac Solstice Internet forums are abuzz with chatter about a marketing tie-in with NBC’s “The Apprentice” on April 14, and reports state that one of the tasks for the contestants will be to create a launch plan for the Solstice, a roadster that has not yet been released to the public. Solstice maker General Motors would not confirm the plan.

A central character on Fox’s “The O.C.,” Marissa Cooper (portrayed by Mischa Barton), drives a new Ford Mustang. Jennifer Garner’s Sydney Bristow character on ABC’s “Alias” has driven both a Ford F150 and a Mustang in action sequences. Pontiac vehicles are incorporated into stunts on CBS reality series “Survivor.”

“You will never see a vehicle on television by accident,” said Mary Kubitskey, advertising manager for Pontiac. In some cases the automaker initiates the placement, as was the case with the Pontiac G6 giveaway on “Oprah.” Pontiac spent $7 million, the cost of 276 new G6s, and received about 37 minutes of air time during the 2004-05 season premiere of “Oprah,” on which studio audience members were given the vehicles prior to their release to the public. In addition to the actual time on the show, the car reaped publicity dividends, as the dramatic giveaway was covered by major media.

Six months later, the G6 is Pontiac’s best-selling vehicle.

“We see when the results come back, awareness numbers increase more with something like that than the traditional 30-second spot,” Ms. Kubitskey said.

Some of these placements, however, are sought out by particular TV shows or figure into broader deals that go beyond a 30-second commercial. Ford, for example, has its cars used in the backdrop of Fox’s “American Idol” music videos, and according to Mr. Johnson, the placements are part of a larger deal that includes the advertisements in the show.

From brand integration and alternate media to video games, automakers are testing the waters to see what will stick with this young generation.



New Ways to Sell

Mr. Needham said automakers have had a hard time grasping how to market to this audience. Because the audience is so diverse, and young people are spreading their attention over several different kinds of media, Mr. Needham said automakers have to find places to advertise that are new for the car industry.

Automakers aren’t familiar with the youth market, he said, and some of the media they need to advertise in aren’t politically correct. He used the underground magazine “Yellow Rat Bastard” as an example.

“Imagine trying to explain that one to the executives,” he said. Sitting in a room full of executives in suits, Mr. Needham said, it was hard to utter the obscenity, let alone explain why Scion should advertise in the Gen Y-targeted magazine bearing the name.

As much as Mr. Needham points toward alternate and underground media, he said automakers do still need TV.

“You have to do TV,” he said. “America is such a big place, you have to do TV.”

Advertisers just have to be careful, he said. If they make it too mainstream, they’ll lose the interest of their target audience.

“Thirty-second TV ads just aren’t working as effectively as they used to,” Ms. Kubitskey said.

That’s because this young generation has a constantly changing media appetite and gets bored easily, Mr. Needham added.

“We’re trying to capture the fickle 20s where every day they’re so over it,” he said.

Not to mention the fact that many Gen Y’ers are early adapters and have the means in addition to the motivation to fast-forward through the commercials.

There is a general consensus among automakers that it’s not just the young generation that they’re up against. It’s also the media itself, as TiVo and other digital video recorders come into play.

“It’s something tha
t’s looming on the horizon that we need to address fairly quickly,” Ms. Ahmed said.

“We’re betting on content,” one network executive said. “We’re betting that people will still want content and that they’ll watch it in real time.”

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