Ad Spending Drives Kia SalesUpstart automaker scores with Super Bowl spots while rivals idle 1/10/2011 12:01:00 AM Eastern
Kia's commercials, featuring hamsters, sock monkeys and
the characters from Yo Gabba Gabba, have gotten a lot of attention.
Airing in the Super Bowl doesn’t hurt when you’re a
relatively new automaker trying to overhaul your image and introduce
new models. Boosting ad spending has helped. Kia’s sales were up 9.8%
in 2009, when other automakers saw sales drop 21.2%. This year, Kia
is up 16.8%. Michael Sprague, Kia chief marketing officer, talked with
B&C Business Editor Jon Lafayette about the
company’s approach to growing its business.
What is Kia’s marketing message? What
do you want consumers to think of when
they hear the brand name?
Some of our initial products in the late ‘90s
weren’t very well received from a quality standpoint.
Some of that perception continues to
kind of drag us down a bit. In the last two years
we’ve introduced seven new products, and each
one of the products is getting better and better.
My job is, for those consumers who had a poor
perception of the Kia brand, help change that
perception. For the consumers who weren’t
well aware of the brand or had no perception of
the brand, help form that perception as a brand
of coolly designed products with great safety
features, innovative and usable technologies,
fuel efficient, and offering great value.
What role does television play?
We use television to build reach. It’s still the
most effective way to reach a large audience.
And that’s why we went into the Super Bowl
last year with our Sorrento campaign. It was
the biggest launch ever for us as a brand. We
had a 60-second ad and reached 110 million
people to showcase this all-new product that was being built in America.
We are also in the Super Bowl for 2011. Our feature vehicle there will
be our all-new Optima.
With the Super Bowl ads, I assume your spending is up yearover-
Yes, that’s a fair statement. In 2009, when a lot of companies were pulling
back their media, we actually took a different approach and invested
more in 2009. We looked at it as an opportunity to talk about our new
product and build our awareness in a time when people were looking
for value. So the timing worked well. And we continued that strategy in
2010 as we were launching all of the new products.
You said part of your goal is to drive people to your Website,
where they can get more information. Are you also doing more
interactive and online advertising?
Absolutely. I would say that’s where we’re channeling more money as our
budgets expand, and that’s simply because of the explosion in consumers
going online, whether at their desktops, or their laptops or their iPads,
or now through their mobile devices, their smartphones, etc. In 2011 we’ll spend even more money in mobile applications
because our dealers tell us that consumers
are coming into their lots with their mobile
devices. They used to come loaded with paper
comparisons, and now they’ve got it all in their
That’s our strategy: Build the awareness,
drive traffic to our Website in hopes that the
consumers will either visit a dealer in person
or make contact with a dealer through what we
call our electronic leads program, where they’ll
go on and configure a product and then send
a notice to a dealer to say, hey I’m interested in
this product and I’d like to learn more about it
electronically or through a phone call.
Who is responsible for making sure that all these media work
That would be my job and my team’s job. I also have PR responsibility as
well, which for me is very important because we want to make sure the
messaging is consistent every step of the way, at every point a consumer
could potentially see the brand or read about
the brand or connect with the brand.
Are media vendors doing all they can to
make this easy for you?
That’s a loaded question, considering who
your audience is.
That’s the point.
Everybody has something to sell. As a marketer,
I’m looking for companies that can
come in and show me integrated plans, because
otherwise I’ve got to put all the pieces
together. But if somebody can come in and
say, OK, here is an opportunity in television,
which then flows through to print, which
flows through to online or digital or maybe
an experiential component, that just makes
my life so much easier. And from a creative
standpoint, I can give my creative agency one
directive. Some of the companies [that can
do this], maybe they’re a little too big and
bureaucratic, so I still want to listen to the
start-ups, the more aggressive companies who
sometimes have cool and innovative ideas.
What’s the coolest thing someone has
brought into your office lately in terms
of a media or media technology?
Earlier this year, we were the first automotive advertiser on Zinio; it
was the online magazine publication. It was basically taking a magazine
and putting it online and giving consumers access to it digitally. From
an advertising standpoint, it allowed me to add more content. It was
no longer a printed piece of paper where somebody saw my ad—they
could click on it and learn more, and I could have other content. I felt
that that was really cool. The iPad we were approached on, but from a
cost standpoint it wasn’t effective for us.
But some of the stuff people are doing on the gaming side is pretty
cool for us, particularly if we are targeting Gen Y with some of our products.
Those are some of the things that have been pretty cool for us.
Kia's introduced a lot of new models in the past few years.
Is that changing what the brand stands for?
In the late ‘90s, early 2000s, we were basically a
fuel-efficient, low-cost value brand and now we're offering so much more.
The recession has actually helped me a great deal because
consumers were shifting from some of the more premium or ostentatious brands to
value brands. And just as I was going into this new product cadence, and it
started with the Soul back in March of 2009, three months later we followed up
with the Forte, which is a compact sedan, so for your reference it competes
with the Ford Focus or the Toyota Corolla, or the Honda Civic. We then came out
with a two-door version of that called the Forte Koupe, Koupe spelled with a K
just to be unique and whimsical, follow that up with a new Sorrento crossover,
which was the first vehicle built in our first manufacturing plant down in West
Point, Georgia. That was the vehicle that we featured in our Super Bowl spots
in 2010, which was the first time that we were in the Super Bowl.
We just launched the all new Sportage crossover; that
vehicle competes with the Ford Escape, the Mercury Mariner, the CRV, and then
we're now launching our all new Optima, in the sedan segment, the Camry, the
Accords, the Ford Fusions. It's the largest car segment at 1.8 million this
year and it's the first time we're going to offer a gasoline direct-injection
engine, a turbo and our first hybrid.
We know that a lot of consumers wouldn't consider us because
we didn't offer a hybrid. They may not want a hybrid, but they wanted to deal
with a company that is environmentally conscious and by offering a hybrid
within our portfolio, it now gets us on those people's shopping lists.
Which consumer segment are you trying to reach through
For each individual vehicle, we have a target customer, a
media target, and so we use television to reach. So for the Soul it was Gen Y.
So we spent a lot of time in cable, MTV, those are shows that reach Gen Y more
effectively than say something on the networks. We were on the networks, but
not as much as we were on cable.
For Sorrento, it was more network because of who the target
customer was that we were going after.
Who was that customer?
For that customer they were a couple who were either
starting a family or has one or two young children. The vehicle is a crossover
so it was available in a five-passenger or seven-passenger configuration. It
was people who probably had a compact car or mid-size sedan but needed more
cargo capacity. They didn't need a vehicle with towing capacity, because that
just didn't fit their lifestyle, or needed space for baby seats and all the
stuff that came with that stage of life.
How do you figure out how to reach those target audiences?
We work very closely with our media agencies. We work with a
company called Notion, which works as an aggregator on behalf of us, the Kia
brand, and then we have a sister brand, Innocean, in the U.S. It's Hyundai.
Hyundai and Kia are two separate and distinct companies here in the U.S. I
don't know anything about their plans, they don't know anything about mine. But
in media buying opportunities, we've consolidated our media through Innocean.
They work with Initiaitve Plus. They act as the media buying agency, Innocean
works as sort of a strategic advisor and balances the media buying between the
two companies. They know what my plans are, what my objectives are, they know
what Hyundai's are and then they go and work with Initiative to say OK, from a
media buying standpoint, this is the total budget, here's Kia's portion, here's
Hyundai's portion. So we work closely with Innocean and Initiaitve. They are
involved in our strategic planning, they know what our plans are for the next
two to three years, so they know what the major vehicle launches are and they
know what the core models are that we're going to focus on. And then, as we're
going into the launch phase, they're briefed on who the target customer is from
a demographic standpoint and they go off and develop a media target and then
come back with plans and present those, and we fine tune them with them. So
actually, it starts pretty early in the process in the product development
cycle and when we develop our products we have a target customer in mind who
we're going after-and its age, ethnicity, professional, all of the demographic
pieces of it. We know these customers have needs from a vehicle, so we try to
develop vehicles that fit those needs and their lifestyles. That's three to
four years in advance. As we get closer to the launch we then bring in the
media companies to say this is the product, this is who it's targeted toward,
now let's go figure out how to market it to that customer from a media
standpoint. That's probably about a year in advance.
You're looking to get some of that cool factor for your
products. Are there any brands that you want to be associated with that are as
cool as you want to be?
Our NBA sponsorship has been really cool for us and its
helped build our awareness and helped elevate the brand. We have not only the
league sponsorship, we have individual sponsorships with 13 teams throughout
the U.S. and that's been very effective as well. The NBA is a brand.
Is that relationship with the NBA exploited through
We've got a number of different elements. We are the
official automotive partner of the NBA. Our new Optima will be the official
vehicle of the NBA, we're the presenting sponsor of tipoff week, which was late
October, early November, this year we we've got sponsorship of the All-Star
game, which in the past Toyota had that. We're a partner with the NBA in their
charitable organization, NBA Care. It's not just television, there are other
elements. It's in arena, it's digital, it's experiential, it's on the
charitable side as well, our dealers are very involved, particularly in the
markets where we have the team sponsorships. That is a really well-integrated
Anything else we should know about Kia?
We do consider ourselves a challenger brand here in the US.
We have a 3% share right now. We've got our eyes on gaining a greater share of
the U.S. automotive market in the coming years, so we do approach things
differently, again through the way we do our advertising, it's not the typical
car-on-road type of advertising. The car is always the star, but [where] there
are other opportunities to be the first and to do something, we seize upon
that. We think consumers, when they are shopping for a vehicle, think they do
want to be entertained. They want a lot of the information, which we provide
them, but in an engaging, fun manner.