Church of the Customer Blog
« TV ads don't sell cars, people do | Main | 10 first dates with a book »
February 14, 2004
TV ads don't sell cars, people do
$18.4 billion.
That's what automobile manufacturers spent last year on TV advertising. Car companies are the largest purchasers of television advertising time.
Is it worth it? Cap Gemini Ernst & Young asked that question, too by researching agents of influence in the car-buying process. U.S. consumers were asked what ultimately influenced their purchase decision:
* 17% cited TV advertising
* 26% cited ads on Internet search engines
* 48% cited direct mail from a dealer
* 71% cited word of mouth
If word of mouth is the driving influence for car purchase decisions, then why do car manufacturers spend $18.4 billion to cajole, pander and otherwise annoy us while watching "24?" (Besides, we skip over the ads using our TiVo, right?)
For instance, I want to know:
Why don't car manufacturers redirect 25% of their advertising budgets (that's $4.5 billion) and invest in better design so we have something remarkable to tell our friends?
Why don't car manufacturers redirect 10% of their advertising budgets (that's $1.8 billion) and help the dealers improve the car-buying experience so that we are compelled to tell everyone about the great service?
Why don't car manufacturers take another 15% (that's $2.7 billion) and reduce MSRPs? Is there not a direct correlation to the high price of cars and $18.4 billion spent on ineffective television advertising?
That still leaves roughly $9 billion for manufacturers to spend on annoying the heck out of us.
Other blogs that reference TV ads don't sell cars, people do:
» TV ads don't sell cars, people do from Radio Marketing Nexus
More proof of the importance of word of mouth or "Buzz" Church of the Customer: TV ads don't sell cars, people do [Read More]
» word of mouth influenced what they bought from maundering
Word of mouth has huge role in purchase decisions . [Read More]
I suspect the sense of "control" over the message is a very tough element to escape.
Executives feel they can't control what is said by their thousands of customers. "TOTAL control" of a 30 second 'spot' seems so tangible. I see this quite often: organizations focusing on something insignificant but 'controllable' and ignoring powerful yet [only] influenced elements.
Matt,
Great comment. I think you are exactly right. I used to work at a Fortune 500 company and this desired sense of control was always there.
It's funny to think that these executives don't realize that word of mouth happens no matter what, and that they are not, and never have been, *in control* of this important sales influence. One can only hope to stimulate it positively.
Thanks so much for your comment!
Jackie
I would argue that it's largely EGO that continues to drive the insane (and insanely priced) network TV advertisement. Notice that the 2nd most influential is Direct Mail from the dealer. Problem is, I don't see many CMOs putting direct mail samples on their refrigerators at home. Guarantee they keep a copy of every reel they birthed.
