Foreign Auto Makers Suit Up for Super Bowl; Costly TV Spots Will Play High-Profile Part in Manufacturers' Push to Gain Ground Against Their American Rivals

The Wall Street Journal
1/21/2010Foreign car makers are marketing their vehicles more aggressively in the U.S., and are making the Super Bowl a high-profile part of their strategies for wresting market share from American rivals.

On Feb. 7, tens of millions of football fans will see about a half-dozen auto commercials from at least four overseas manufacturers flicker across their TV screens during the big game. Last year, three auto makers, advertised on the Super Bowl broadcast.

Most of the automobile ads airing during next month’s National Football League championship game will be from the U.S. units of Volkswagen, Hyundai Motor, Honda Motor and Audi, VW’s luxury unit.

Chrysler’s Dodge brand snapped up one of the few remaining ad slots on the gridiron matchup, which will air on CBS.

Kia Motors America, the U.S. unit of South Korea’s Kia Motors Corp., will be a first-time Super Bowl advertiser. A relatively small player in the U.S. market, Kia will enter the fray with a commercial targeting “mountain-biking dads and blogging moms,” says Michael Sprague, Kia Motors America’s vice president of marketing.

In Kia’s spot, Muno, a spindly pink Nickelodeon puppet with one eye, and a grab-bag of other children’s characters crisscross the U.S. in a 2011 Sorento crossover, visiting places including Las Vegas. Mr. Sprague says the ad is aimed at younger parents with small kids who aren’t ready to give up the sportier ride that a Sorento offers.

The 60-second commercial, crafted by independent ad shop David & Goliath, is a costly gamble for the company, but one it thinks it can afford after what market-research firm Autodata says was a 9.8% increase in U.S. market share last year.

Last year, Hyundai took advantage of cash-strapped General Motors’ sudden exit from the big game and bought two Super Bowl ads. That helped the South Korean auto maker launch its “Assurance Program,” which promised consumers they could return their cars if they lost their jobs within a year after purchase. Hyundai will run two ads during the big game again this year.

The Volkswagen brand is returning to the Super Bowl after a nine-year hiatus. VW’s ad, which is being created by Interpublic Group’s Deutsch LA, will feature 13 of its vehicles. VW is trying to persuade Americans that its offerings extend well beyond the ubiquitous Beetle.

The VW spot will show people playing the children’s game Punch Buggy, in which players punch each other in the shoulder upon first sight of a Beetle and call out “Slug bug!” or “Punch buggy!” The ad will encourage consumers to play the game when they spot any VW model.

“Everybody knows about Volkswagen, but most people think it’s about one or two cars,” says Tim Ellis, vice president of marketing for Volkswagen of America. Mr. Ellis says the ad is part of a larger push to expand in the U.S., which includes an overall increase in ad spending. Last year, VW’s overall U.S. ad spending for the first nine months was up 4% from a year earlier, to $200.5 million.

VW says there will be a “more dramatic increase” in its advertising and marketing program in 2010, but it declined to give specific figures.

U.S. car makers, while showing signs of life, still suffer from issues that range from higher fixed costs and overcapacity to diminished size and market share. That represents an opportunity for their foreign rivals.

At the same time, any signs of an uptick in ad spending by auto makers as a whole would be welcome news to the advertising and media industries. For the first nine months of 2009, U.S. ad outlays by car makers were down 30% from a year earlier, according to ad tracker TNS Media Intelligence, a unit of WPP. Spending on car ads has shown year-to-year declines for 17 consecutive quarters.

Even the Super Bowl, which typically draws close to 100 million viewers, hasn’t been immune. Auto makers spent about $18 million on the big game in 2009, a far cry from the $26.4 million they spent in 2005, according to TNS.

“Auto’s participation in the Super Bowl is a significant indicator” of the health of Super Bowl ad sales and the auto industry, says Jon Swallen, senior vice president of research at TNS, a unit of WPP.

Despite the increase in the number of car makers heading to the Super Bowl this year, many of the big guns, including Toyota Motor and GM, are sitting on the sidelines.

GM, which had long been one of the biggest advertisers on Super Bowl Sunday, pulled out of the contest last year because of its financial difficulties. Toyota’s ad firm says the big game “doesn’t align with any of Toyota’s marketing initiatives” this year.

With the U.S. economy still recovering, and amid persistent questions about the future of the U.S. auto industry, the payoff of auto advertising on the Super Bowl remains unclear. Prices for ad time are steep, with 30-second slots fetching between $2.5 million and $2.9 million, according to media buyers.

Then there is the perennial danger of overwhelming the viewer. “There is a big chance those car makers’ ad messages will be diluted, because viewers will be blasted with too much of the same type of advertising,” says Dean Crutchfield, a branding expert. “It’s going be sensory overload.”

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