P71_CrownVic Posted December 11, 2007 Share Posted December 11, 2007 Findings: The Vehicles That Drove ROI in 2007December 10, 2007 By Steve Miller Besieged by poor ratings, recalls and failed ad campaigns, 2007 was a tough model year for carmakers. Overall U.S. auto sales have dipped to around 16 million units, down about 500,000 units from last year, per Global Insights, Boston. Next year the trend is expected to continue as 15.8 million cars and trucks are projected to be sold. This made the hits of the category all the sweeter for automakers, and the misses all the more disastrous. One of the brightest spots was the success of the Toyota Tundra pickup, which splashed into the lucrative segment with two Super Bowl spots highlighting its towing capacity. The success came at a cost, though. Toyota spent $1,404 on measured media for every Tundra sold. Its ad spending was nearly $250 million for the first nine months of the year. The highly competitive mid-sized sedan segment had both ups and downs. While the Chevy Malibu blew the doors off in terms of critical acclaim, the Ford Taurus, Dodge Avenger and Chrysler Sebring just, well, blew. Mid-sized sedan sales make up more than a third (34%) of the overall auto market. The Ford Taurus proved to be a particular letdown. “It should be selling 8,000 to 12,000 a month, instead of 5,000. It’s the invisible car,” said Todd Turner, president of auto consultancy Car Concepts in Thousand Oaks, Calif. Fortunately for Ford, the company spent a relatively small $29 million on marketing for the car. For every car it sold, it invested only $108 on measured media. Reduced advertising appeared to be a trend as overall auto category ad spending was down 12% through September, compared with the same period in 2006, per Nielsen Monitor-Plus. Here’s a rundown of the return-on-investment for the best and worst selling cars of 2007. HITS: Toyota Tundra Ad spend/sales ratio: $1,404 Ad spend: $249 million Units sold: 177,336 through November Selling proposition: Power and performance. “The truck that changes it all.” Launched: February. Achievement: Survived a savage attack by GM dealers who questioned the truck’s towing claims. “That was a low point,” said Toyota truck marketing manager Brian Smith. “These false accusations were unquestioned. We had to defend ourselves.” Buick Enclave Ad spend/sales ratio: $179 Ad spend: $44 million Units sold: 24,560 through November Selling proposition: “The finest luxury crossover ever.” “Quieter than a Lexus 350” and “more spacious than a Mercedes R-Class.” Launched: April. Achievement: Buick generated demand by taking on high-end imports in ads in upscale lifestyle books and via a small broadcast buy. The waiting list was 3,500 deep at one point. Chevrolet Malibu Ad spend/sales ratio: N/A Ad spend: Projected to be $300 million Units sold: 7,210 through November Selling proposition: “The car you can’t ignore.” Its look and rich interior has wowed critics. Launched: October. Achievement: “We are not disposed to looking at this car because of its reputation, but it is everywhere. And it’s a good car to look at and drive,” said John Wolkonowicz, analyst at Global Insight, Boston. MISSES Ford Taurus Ad spend/sales ratio: $108 Ad spend: $29 million Units sold: 26,720 through November Selling proposition: Safe. Print ads blared: “Rated the safest full-size car in America.” Launched: June Why it failed: The Taurus once was the best-selling sedan in the U.S. But, a series of miscues ended its reign and it was replaced with the 500, which failed. The relaunched Taurus tried to rally around safety, which is a one-trick game. Volvo wins with that gambit, not Taurus. Dodge Avenger Ad spend/sales ratio: $84 Ad spend: $64 million Units sold: 75,658 through November Selling proposition: “It’s that much fun to drive.” Print ads show a red Avenger with joystick attached. Launched: February Why it failed: “The Avenger has been under-marketed, plus it isn’t all that great,” said George Peterson, president of Auto Pacific, a marketing research firm based in Tustin, Calif. “Chrysler hasn’t had time to devote to marketing with all the changes this year, and things like the Avenger have suffered.” Chrysler Sebring Ad spend/sales ratio: $110 Ad spend: $93 million Units sold: 83,856 through November Selling proposition: Design. The tagline trumpets the car as being “Engineered beautifully.” Launched: October 2006 Why it failed: Suspect engineering, as the Sebring was subject to six recalls this year. The ad campaign, which focused on heated and cooled cup holders and a high-tech entertainment system, forgets that consumers have misgivings about Sebring’s overall quality. Linky Quote Link to comment Share on other sites More sharing options...
SVT_MAN Posted December 11, 2007 Share Posted December 11, 2007 Ford didn't advertise the car - how are people supposed to know about it? Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted December 11, 2007 Share Posted December 11, 2007 Ford didn't advertise the car - how are people supposed to know about it? Excatly! They spent only $29 million on the car..vs $300 million on the new Malibu...I guess we'll see if that does anything with Malibu sales this time next year Also doesn't help the Tundra too much when it has 6K rebates on it! Quote Link to comment Share on other sites More sharing options...
Edstock Posted December 11, 2007 Share Posted December 11, 2007 Sure hope the new marketing chooch fixes this . . . . Quote Link to comment Share on other sites More sharing options...
SVT_MAN Posted December 11, 2007 Share Posted December 11, 2007 (edited) The sad part is, the Taurus is one of the best cars out there - and yet it is one of the slowest selling. I'm sure Ford knows it's selling slowly. What do they know that I don't? They just spent a ton of money updating it, and now they hide it from the consumer? Edited December 11, 2007 by SVT_MAN Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 11, 2007 Share Posted December 11, 2007 Ah yes, more links to blogs..... Because what the internet really needs is links to someone's opinion of an article that appeared somewhere else. Feedback loops are annoying and irritating in audio equipment. And the 'net. Quote Link to comment Share on other sites More sharing options...
papilgee4evaeva Posted December 11, 2007 Share Posted December 11, 2007 The sad part is, the Taurus is one of the best cars out there - and yet it is one of the slowest selling. I'm sure Ford knows it's selling slowly. What do they know that I don't? They just spent a ton of money updating it, and now they hide it from the consumer? I just thought about this... how many companies out there still actively advertise their big cars on a regular basis? The last ad campaign I saw was the last time they were running Chrysler 300 ads. Quote Link to comment Share on other sites More sharing options...
SVT_MAN Posted December 11, 2007 Share Posted December 11, 2007 Ah yes, more links to blogs..... Because what the internet really needs is links to someone's opinion of an article that appeared somewhere else. Feedback loops are annoying and irritating in audio equipment. And the 'net. Honestly, I agree with you. I hate blogs. I think they are the worst thing to ever happen to the Internet. A great deal of the Internet is a waste anyway though - I suppose. Quote Link to comment Share on other sites More sharing options...
Roadrunner Posted December 11, 2007 Share Posted December 11, 2007 Ah yes, more links to blogs..... Because what the internet really needs is links to someone's opinion of an article that appeared somewhere else. Feedback loops are annoying and irritating in audio equipment. And the 'net. Cheap Shot from the cheap seats, Richard... Cheap Shot. Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted December 11, 2007 Share Posted December 11, 2007 Ah yes, more links to blogs..... Because what the internet really needs is links to someone's opinion of an article that appeared somewhere else. Feedback loops are annoying and irritating in audio equipment. And the 'net. Like this place is much better :P Quote Link to comment Share on other sites More sharing options...
atomaro Posted December 11, 2007 Share Posted December 11, 2007 That article lost all credibility by the 4th or 5th sentence. Quote Link to comment Share on other sites More sharing options...
2008fordtaurus Posted December 11, 2007 Share Posted December 11, 2007 The sad part is, the Taurus is one of the best cars out there - and yet it is one of the slowest selling. I'm sure Ford knows it's selling slowly. What do they know that I don't? They just spent a ton of money updating it, and now they hide it from the consumer? I couldn't have said it better. I have one and it is perfect for us. I can only shake my head at Ford for not promoting it. Quote Link to comment Share on other sites More sharing options...
laserred02 Posted December 11, 2007 Share Posted December 11, 2007 I don't get it, all the failures spent less money per car sold than the hits, so basically are they saying they didn't advertise enough? The Tundra spent $1400 per truck sold and how much in incentives, but it is a "hit". Anyways, obviously the Taurus is not selling well enough, but if anything all this article illustrates is that Ford has not advertised the car enough. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 12, 2007 Share Posted December 12, 2007 Like this place is much better :P If you went on some other message board, and found nothing but links to -this- message board, what would be the point of -that- message board? The Brand Week blog has some credibility, but it stretches all bounds of reason and common sense to treat an advertising program as a success based -solely- on the number of vehicles sold. Heck, Ford sold almost 80,000 Crown Victorias last year with almost no advertising whatsoever. Means that their advertising buys were just spot-on perfect, right? Balderdash. Quote Link to comment Share on other sites More sharing options...
Former Ford ZM Posted December 12, 2007 Share Posted December 12, 2007 This disgusts me and I for one bleed Ford blue and maybe I do a little too much "cheerleading" but c'mon folks, it's obvious the old idea of "Oh no, let's not let everyone know about this good car and hope it'll sell on its own merits" is still around. As for the Tundra, Farley said that Toyota has $40 Billion allocated to it. Their intent is/was to get the domestics in a price war and just outlast us all and then bury us. Quote Link to comment Share on other sites More sharing options...
laserred02 Posted December 12, 2007 Share Posted December 12, 2007 This disgusts me and I for one bleed Ford blue and maybe I do a little too much "cheerleading" but c'mon folks, it's obvious the old idea of "Oh no, let's not let everyone know about this good car and hope it'll sell on its own merits" is still around. As for the Tundra, Farley said that Toyota has $40 Billion allocated to it. Their intent is/was to get the domestics in a price war and just outlast us all and then bury us. It doesn't seem to be working in my estimation. Toyota has put more money on the hood of their new truck than Ford on a couple year old design of the F-150. Unless I have missed something, the quality problems, the advertising money, and the investment money, make me think Toyota will not turn a profit on this truck. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 12, 2007 Share Posted December 12, 2007 As for the Tundra, Farley said that Toyota has $40 Billion allocated to it. Their intent is/was to get the domestics in a price war and just outlast us all and then bury us. If Toyota is willing to expend four years of global profits in an effort to 'bury' the domestics, then they are going to crash and burn. That kind of out-of-bounds fixation is going to be bad for their business. Quote Link to comment Share on other sites More sharing options...
SVT_MAN Posted December 12, 2007 Share Posted December 12, 2007 If you went on some other message board, and found nothing but links to -this- message board, what would be the point of -that- message board? The Brand Week blog has some credibility, but it stretches all bounds of reason and common sense to treat an advertising program as a success based -solely- on the number of vehicles sold. Heck, Ford sold almost 80,000 Crown Victorias last year with almost no advertising whatsoever. Means that their advertising buys were just spot-on perfect, right? Balderdash. I know you are saying the above in cynical manner to prove a point, but it really isn't an accurate comparison. Crown Vics are largely fleet vehicles at this point, they are a vehicle that people know about already (and in large part, people buy them based on reputation). The Taurus on the other hand, is a new vehicle. "New" vehicles need heavier promotion than older ones because people don't know about them. Typically your advertisements are heaviest at the beginning and the end, aren't they? I know this is probably not news to you. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 12, 2007 Share Posted December 12, 2007 (edited) it really isn't an accurate comparison Actually, it is. The article purports to show what advertising was successful, based solely on sales versus ad dollars spent. If my conclusion off those numbers makes no sense, the analysis in the article makes no sense. QED. Edited December 12, 2007 by RichardJensen Quote Link to comment Share on other sites More sharing options...
Former Ford ZM Posted December 12, 2007 Share Posted December 12, 2007 (edited) If Toyota is willing to expend four years of global profits in an effort to 'bury' the domestics, then they are going to crash and burn. That kind of out-of-bounds fixation is going to be bad for their business. See...that's the problem. THAT IS WHAT THEY INTEND TO DO! "Don't worry, we've allocated $40B to Tundra. Let the domestics get into a pricewar. We will bury them." It's a Cold War in a sorts. Hopefully they will be the Soviets and spend their way to failure... Edited December 12, 2007 by Former Ford ZM Quote Link to comment Share on other sites More sharing options...
SVT_MAN Posted December 12, 2007 Share Posted December 12, 2007 Actually, it is. The article purports to show what advertising was successful, based solely on sales versus ad dollars spent. If my conclusion off those numbers makes no sense, the analysis in the article makes no sense. QED. I agree the metrics used in the article are lame. Maybe a more meaningful metric would have been something like ad dollars spent versus profit per vehicle or something. I don't know. Because I know that Toyota can't be winning much profit putting that much money on the hood and spending that much on advertising. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 12, 2007 Share Posted December 12, 2007 (edited) See...that's the problem. THAT IS WHAT THEY INTEND TO DO! "Don't worry, we've allocated $40B to Tundra. Let the domestics get into a pricewar. We will bury them." It's a Cold War in a sorts. Hopefully they will be the Soviets and spend their way to failure... And Toyota does what? Destroys the pricing power that they have built up over the past three decades? Wow. If they're willing to trash their ATPs in an effort to 'kill' the Big Three, they'll find that they've bit off far far far far more than they can chew. I mean, Toyota has already started to undermine the pricing power of the Camry, when they become known as just another inflated gorilla, "Crazy Eddie", "We must be out of our mind to sell cars this cheap" car company, they are screwed. Really, what does Toyota have going for it, besides its reputation? What does any company have, besides its reputation? Why do you think drug companies spend more than twice their R&D budget on advertising and marketing? Toyota does this, they are doing to themselves what no other company can do to them. They are trashing their own reputation. How long do you think Starbucks could get away with $1.80 for a 16 ounce coffee the other six days a week if they started selling coffee for $1.25 on Mondays? Toyota, if this is their strategy, has taken up an ax, and is busy chasing down the goose that lays their golden eggs. Edited December 12, 2007 by RichardJensen Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 12, 2007 Share Posted December 12, 2007 I agree the metrics used in the article are lame. Maybe a more meaningful metric would have been something like ad dollars spent versus profit per vehicle or something. I don't know. Because I know that Toyota can't be winning much profit putting that much money on the hood and spending that much on advertising. Well the whole premise is preposterous. Calculating ROI with only a handful of known factors and a huge number of unknowns. This article would've better served the world at large if it was relegated to duty as one of many implements in the housetraining of a dog. Quote Link to comment Share on other sites More sharing options...
SVT_MAN Posted December 12, 2007 Share Posted December 12, 2007 Well the whole premise is preposterous. Calculating ROI with only a handful of known factors and a huge number of unknowns. This article would've better served the world at large if it was relegated to duty as one of many implements in the housetraining of a dog. You have an interesting way of telling people that something is useless, I'll give you that ... Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 12, 2007 Share Posted December 12, 2007 (edited) You have an interesting way of telling people that something is useless, I'll give you that ... Oh, but I beg to differ, once printed out that article would be very useful...... in preventing stains to carpet from puppy-uh-ohs. And it should have been "were relegated," not "was relegated." Edited December 12, 2007 by RichardJensen Quote Link to comment Share on other sites More sharing options...
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