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Auto companies’ marketing spending last year didn’t appear to have fallen as much as some observers expected, aided by massive branding efforts designed with the future in mind, especially the shift to electric vehicles.
In 2022, the auto industry suffered supply constraints from economic concerns, inflation and production disruptions. A year like that could typically push auto marketing off a cliff.
However, marketers such as General Motors and Hyundai Ltd.
Kia America Inc. and Kia America Inc., three companies with strong EV product sales, actually increased their marketing spend in the first half of last year, according to Magna research.,
A media investment firm that is part of the Interpublic Group of Cos. media brand. The company doesn’t have full-year data yet.
Overall automotive ad spend on national television in the first three quarters of last year was down 11.6% from the same period in 2021, according to media measurement and research firm Nielsen.
But automakers didn’t necessarily have to advertise to sell a limited inventory of vehicles, and could have chosen to save that money instead, says Vincent Létang, executive vice president and managing director. This decline could have been much more severe, according toGlobal Market Research at Magna.
Last year was “just a seller’s market,” Mr Letang said. “Given that context, advertising spending would have been expected to be significantly lower than it actually was.”
The focus has been on brand and electric vehicle marketing, which, combined with improved production this year, suggests that car marketing may recover. Magna believes the automotive category will grow for the first time in years in 2023.
Commercials promoting electric vehicles accounted for 24% of automakers’ TV spending in 2022, up from 13.8% in 2021, according to TV advertising research firm iSpot.tv Inc.
According to Russell Wager, Kia America’s vice president of marketing, Kia will continue to spend in 2022 to support future demand.
“We haven’t taken our feet off the accelerator because we’re seeing the EV transformation happening,” Wager said.
Last year’s Super Bowl played a role in kicking off Kia’s EV6, but it wasn’t a mass-market vehicle for the company to put off such a massive marketing effort.
“You can’t put a car into the Super Bowl to sell 20,000 cars. It doesn’t make sense,” Wager said. “This is what we do when we’re trying to tell people that we’re a legitimate EV brand. Not just the EV6, but his upcoming EV9,” and other products on their consideration list. It is.
To reach more affluent car enthusiasts, the brand also ran TV ads for its high-end EV6 GT, which it normally advertises exclusively through digital, print and social media ads.
“Unless you create an electrifying halo for your brand, you generally don’t do it on TV,” Wager said.
Kia will be attending the Super Bowl again this year, this time promoting the Telluride SUV.
Hyundai also said last year that it “intentionally maintained” its profile across almost all marketing channels, including TV and digital.
Angela Zepeda, chief marketing officer at Hyundai Motor America, said in an email: “Even when demand outstrips supply, it’s important to increase brand awareness and opinion and establish leadership in electrification. The company will launch another EV-focused campaign during the NFL Conference Championship Game on Jan. 29, she said.
Admittedly, not all brands are looking to bring their EV products to the biggest stage of marketing. Ford Motor CEO Jim Farley at an investment conference in June Ltd.
suggests that brands spend a lot of money on traditional marketing, but incentivizing customers and updating vehicles are better investments.
“Instead of doing a Super Bowl ad, they should do something like that,” Farley said. “If you see Ford Motor Company running a Super Bowl ad for our electric car, sell your stock.”
Automakers in this recent market no longer have to spend so much to offer incentives like low-interest loans and cash rebates to get consumers to buy cars, according to the Automotive Digital Marketplace. Zach Krell, Industry Analyst at TrueCar.
“There’s been a shift in what automakers advertise and focus on, and EVs are definitely the frontrunner,” said Krelle. “Automakers don’t need to incentivize vehicles for sale, so they may shift their focus to vehicles they want consumers to be more aware of.”
Write to Megan Graham at Megan.graham@wsj.com.
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