Auto Makers Embrace Social Media

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					Auto Makers Embrace Social Media
Winning the Social Media Race

From manufacturers to dealers, the automotive business is embracing social media just as fast as any other industry
out there. For the US automotive industry, which has been on a roller-coaster ride since the last few years, social
media seems to be the light at the end of the tunnel. With active vehicle buyers more than willing to follow a brand
on Twitter or checkout teaser videos of the soon-to-be-launched
car, auto makers have found a low-investment, high returns
solution to their marketing problems. Much before the other
brands could catch up, Ford, considered to be the poster child for
auto makers, made it very clear that social advertising is no longer
a fad or an accessory to traditional marketing. According to the
„Top Social Brands for 2010′ report by Vitrue:

        Automotive brands represented 17% of overall web chatter
        on popular social media websites, behind only Consumer
        Electronic Brands (30%) and Fashion and Retail (20%).
        Ford, Mercedes, BMW, Honda and Ferrari were top five
        social automotive brands of 2010.

The above data shows that social media plays a crucial role in
marketing for the automotive industry overall. Automotive
manufacturers have long since discarded the tag of being „late comers‟ to social media. The millions of dollars set
aside exclusively for social advertising and the creative digital campaigns that have been launched so far, indicate
that auto makers are serious about winning the social
media race. When it comes to social media marketing,
this industry is showing no signs of slowing down. Here
are some reasons why:

        Luxury car makers like BMW, Mercedes-Benz and
        Audi have a strong presence of YouTube,
        Facebook and Twitter because social media is
        where their potential customers are.
        Social media is a powerful tool for brands to test
        the waters before launching a campaign or a
        product.
        Auto companies monitoring online conversations
        pertaining to their brand can address questions
        about their vehicles and provide answers almost
        immediately.
        The pre-launch buzz generated on various
        networking channels reduces the amount of
        traditional advertising done by a company after
        the vehicle goes on sale.
        Besides generating sales, social media marketing
        for automotive manufacturers also lowers
        business costs.
        The interactive nature of social media
        establishes strong brand-customer relationships
        and helps connect with fans, owners and
        prospective buyers.

        The Social Influence on Purchases
    The last few years have witnessed a major shift in
    the way customers make purchasing decisions. Unlike


© Position2, Inc.                                                                                                      1
    before, when traditional marketing messages majorly influenced how people shopped, social networking has
    changed the way consumers think, decide and buy. According to a recent study by eMarketer:

                o   21% of vehicle purchasers were influenced by some form of social media.
                o   Ford owners were more likely to be influenced by online reviews and earned media than Chevy or
                    Toyota owners.
                o   People who bought Toyotas were highly influenced by coupons and discounts than those who
                    purchased Fords or Chevys.

    It is clear how influential social media can be when it comes to buying automotives. However, we were eager to
    know how these companies, using social media marketing, persuaded people to buy their vehicles. Here‟s what we
    found:

                o   WOM Recommendations: Car makers are
                    depending on networking sites such as
                    Facebook and Twitter to spread the word
                    about new car launches, events and services
                    provided. The likes of Toyota, Ford, and Land
                    Rover are turning to young social media
                    influencers to create buzz around their
                    products. Word-of-mouth recommendations
                    are not only inexpensive when compared to
                    high-profile celebrity endorsements, but also
                    increase the probability of reaching
                    prospective customers online. The influencers, with their strong online followings, give a brand
                    more credibility with younger shoppers. Toyota Motors‟ digital campaign for its new compact
                    Lexus CT 200h enlisted social media personalities such as Baratunde Thurston (Web Editor of satire
                    website the Onion) and Brian Solis who propagated the message, creating significant buzz around
                    the brand.

                o   Discounts, Deals and Special Offers: Discounts, deals and offers are key driving factors for
                    consumers looking to buy anything, whether it is apparel or automotives. When it comes to
                    shopping for a car, one of the first places prospective buyers will check out is a brand‟s social
                    media page before actually visiting a dealership. Offers such as „free gas cards‟ for people „liking‟
                    a page, „retweet for a test drive‟, „free auto insurance‟ etc will not just encourage people to visit
                    the dealership, but also play an important role in influencing their purchasing decisions.



        How the Big Players Nailed It
    What makes companies like Ford, Toyota, Honda GM etc the
    industry experts in social media marketing? Our research on
    how the big players established a strong social media footprint
    and what online marketing strategies they used revealed some
    interesting findings:

                o   Building the Pre-Launch Buzz: When it comes
                    to building pre-launch social media buzz, no
                    one does it better than Volkswagen.
                    Automakers looking to gain visibility and build-
                    up online chatter about their vehicle can take
                    a leaf out of Volkswagen‟s social media marketing book. The company „accidently‟ leaked its
                    Super Bowl commercial on YouTube before the kickoff, generating the most buzz in cyberspace.
                    Viral Video Chart‟s list of most contagious global viral ads ranked the Volkswagen commercial,
                    „The Force‟, as #1.

                o   Nothing Works as Well as a Facebook Games: Instead of merely launching a Facebook contest to
                    promote its CR-Z, Honda took it one step further by entering the „Car Town‟ Facebook game. The
                    Japanse automaker played all its cards right by a) targeting the car-enthusisats who would

© Position2, Inc.                                                                                                       2
                    eventually check out the vehicle either on the company‟s website or by visiting a Honda
                    dealership and b) highlighting the car‟s sporty and fuel-efficient capabilities in the game version,
                    thus attracting prospctive customers to check out the vehicles‟ video commercial.

                o   Making Fans Feel Special: Getting fans involved in your social media marketing strategy can do
                    wonders to your online traffic; and this is exactly how Ford nailed it. The Detroit auto giant kept
                    hatchback fans in the loop during the production process of its Focus ST. Followers and fans on
                    Twitter and Facebook were treated to sneak peeks, videos of test drives, and were informed of
                    step-by-step developments during the production phase of the car. The outcome? Over +300,000
                    Facebook users have signed up so far.

                o   Revamping Brand Image: The global financial crisis, which was at its peak in 2009, severely
                    impacted the auto industry. One of the companies that was hit hard, not just financially, but also
                    with respect to brand image, was GM. The company‟s comeback strategy was smart and creative.
                    With little bank balance remaining, the automaker used social media to explain their recovery
                    plan, showing that they still cared about their customers. The GM: Reinvention campaign, which
                    was launched on Twitter, Facebook as well as blogs, successfully changed GM‟s brand image from
                    a financially bleeding company to a
                    transparent and accountable organization.

                o   Engagement is the Key: When it comes to
                    social media, there is a direct relationship
                    between engagement and ROI. One of the
                    most recent automotive brands to set a
                    benchmark in terms of how to engage with
                    fans and customers in social media is BMW.
                    The company was ranked #1 in the inaugural
                    L2 Prestige 100® Facebook IQ Index. The study
                    evaluated each of their 54 Facebook pages,
                    which were maintained according to various
                    geographic regions, business segments and products. What made BMW the „ultimate social
                    machine‟ was its highest engagement rate index; and why not? The brand‟s global page plays host
                    to 5.5 million fans.

        Don’t Drive in the Wrong Direction
    The automotive sector jumped onto the social media bandwagon, even as other businesses were in the initial
    stages of going ‟social‟. While some companies were only too happy to blog, tweet or post, there were few others
    who simply had to get involved because that‟s where the auto enthusiasts and prospective customers thronged.
    Nevertheless, the last few years have witnessed a lot of car manufacturers who have successfully transformed
    their brands by leveraging the power of social advertising and networking. However, where there are success
    stories, there have also been instances where auto manufacturers have driven in the wrong direction. While
    building a social media strategy, here are some things that
    auto makers should keep in mind:

                o   Tweet with Care: For some marketers, the
                    Twitter journey starts with creating an
                    account, handing the reigns over to a ‟social
                    media expert‟ and ends in a one-way street,
                    where response from the company is either
                    delayed or completely absent. While Ford
                    Motor Corp‟s @ScottMonty Twitter account is
                    the perfect example of responsible Tweeting,
                    Chrysler‟s social media faux pas showed how
                    one careless tweet can dent a company‟s
                    image.

                o   Always Listen: The dynamic nature of social
                    networking makes its all the more necessary for marketers to listen, watch and respond to the

© Position2, Inc.                                                                                                          3
                    online buzz concerning their brands. Whether it is fans expressing their dislike for a particular car
                    model, or first-time buyers looking for advice, not monitoring a brand‟s social media activities
                    increases the risk of PR crisis. By using media monitoring tools like Brand Monitor, you know
                    exactly how well that snazzy convertible has been received, if the advertising strategy needs to
                    be tweaked further and what you can do to keep customers happy.

                o   When you Should Own Up: Sometimes the best way out of a sticky situation is to own up,
                    apologize and move on. Chrysler‟s response to the „F-Bomb‟ fiasco was poorly received and only
                    gave the story legs. It is only human to have an „oops‟ moment occasionally and prospective car
                    buyers understand that. Acknowledging the mistake and taking measures to correct it can save
                    time and prevent the situation from snowballing further.

                o   Is Your Social Media Strategy Controlled? One of the biggest challenges GM faced with social
                    media was the company‟s controlled and reactive approach. The company only reacted to
                    negative comments, without being proactive and engaging in conversations. GM‟s controlled
                    presence on social media channels like Facebook, Twitter and YouTube had almost no user
                    generated content. Automakers particularly need to have an open and proactive online approach
                    because a) most people wondering what car to buy are only too happy when offered assistance b)
                    waiting for prospective customers to approach first may result in a missed opportunity c) buying a
                    car can be an emotionally driven decision for some people; in such cases, a smart dealer or
                    carmaker assisting customers gives out the message that „we care‟.

                o   Ironing Out the Imperfections: As an
                    automaker looking to promote products or
                    services on Facebook, you have it all covered;
                    the spec sheet is available, details about the
                    mileage, top speed etc have been included.
                    Yet, the social media page doesn‟t look
                    perfect. Although the most important
                    information has been featured, there are
                    some finer details that go into creating that
                    perfect Twitter handle or Facebook page.
                    Here‟s what we suggest: a) include as many
                    visuals as possible. Attractive visuals are the
                    key to luring customers b) don‟t do a „Lamborgini‟ or „Ferarri‟; double-check for misspelling and
                    c) always link to the main website.

Conclusion
Unlike yesterday, when auto makers solely depended on auto shows and traditional marketing channels for visibility
and revenue, automobile companies are rapidly taking to social media because of the obvious benefits involved. With
industry giants like Ford, Toyota and Honda (to name a few) investing a large part of their marketing spend towards
social media, the road ahead for this industry certainly looks inviting. According to J.D. Power, around 9% of spending
this year by automakers will be digital. In 2012, this figure is expected to rise to about 12%, as more companies
embrace social networking and rich media ads in place of traditional TV and print. With the ever growing ‟social‟
influence on people‟s purchasing behavior, we expect to see both manufacturers as well as dealers depend on
Facebook and Twitter to accelerate word-of-mouth recommendations to connect with prospective buyers. Research
shows that car buyers are doing their homework online before spending thousands of dollars on a new or a used car.
This means fewer people are actually visiting dealerships without having done their research online.

It is every auto manufacturer‟s wish to nail social media like Ford or BMW. Although the big players companies have
established themselves as industry experts in online marketing, their journey has not been without challenges. While
brands like Chrysler showed how powerful a single tweet can be, there were others like GM who leveraged the power
of social media during troubled times. That said, the major shift in the way buyers interact with automotive brands
indicates just how important online marketing has become for automakers. As the Vitrue CEO Reggie Bradford aptly
said, “Social media provides the environment for consumers to drive innovation forward by letting their voices be
heard. Brands that are firmly rooted in the social Web will succeed by being able to harness this tremendous power
of insight and endorsement.”



© Position2, Inc.                                                                                                       4
About Position2
Position2 is a Search and Social Media Marketing firm that delivers continuous growth for our clients using our
proprietary “Surround and Intent” Marketing Methodology, delivered by our products. Our proprietary methodology is
a result of years of experience in working with diverse clients to deliver customer acquisition goals through search
engine optimization (SEO), social media marketing (SMM), and Pay Per Click (PPC) and online media advertising.

Position2 was founded in 2006 with funding from Accel Venture Partners, and has offices in Palo Alto, Bangalore and
Mumbai. Position2 is a certified agency with Google, Yahoo, Bing and is also part of the Google Adwords advisory
council.




Position2's flagship product is Position2 Brand MonitorTM, a platform that allows users to listen, discover and engage
with social media conversations in real time. With a team of over 100 professionals, Position2 also provides expertise
in online marketing solutions: SEO, PPC, Media and Advertising.

Position2 works with leading global brands:




This article is also available on the Position2 Blog: http://blog.position2.com.
For more information, visit http://brandmonitor.position2.com or email info@position2.com.




© Position2, Inc.                                                                                                        5

				
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Description: With industry giants like Ford, Toyota and Honda (to name a few) investing a large part of their marketing spend towards social media, the road ahead for this industry certainly looks inviting.