Jupiter Research expects US automotive online advertising spending to nearly triple between 2002 and 2007, according to eMarketer calculations. Automotive should continue to be a dominant category in online advertising, though note that leading auto manufacturers tend to currently spend only about 1% of their ad budgets online.
Even with small budgets, automakers are stretching each dollar through strategic alliances and developing their own Web sites. One in particular, Volvo, has been marketing online for nearly 10 years. I called up Volvo CRM and E-Business Manager Phil Bienert to discuss Volvo's ever-growing commitment to the Internet.
Berkowitz: What's Volvo doing with MSN Autos?
Phil Bienert: With MSN Autos, we are in the middle of a long-term agreement with them. There are two main components of that agreement.
One is the Volvo Digital Garage, which essentially is a combination of content on MSN Autos specifically geared toward either Volvo owners or people who want to get into more depth with the Volvo brand than you would just get from the typical car comparisons and things like that. It allows somebody who doesn't own a Volvo to get a little bit of a glimpse as to what it's like when you own a Volvo, to get deeper with the brand.
This is the second version, sort of version 2.0, of the Digital Garage. Version 1.0 was quite successful for us, and I think that version 2.0 offers a lot of improvements over that.
Berkowitz: What kind of improvements did you make?
PB: A lot of it had to do with a better-branded look and feel and adding more content to it than we had before. In a lot of cases, it's about bringing together elements that might have already been on MSN but might not have been brought together in a consolidated way before. In some cases, it means us making sure certain kinds of content gets sponsored and presented on MSN. That's one component, the Volvo Digital Garage.
The other component would be the Volvo Virtual Showroom, which we also were the first to do with MSN, which is a much more interactive way of presenting our entire lineup than just sort of searching through the drop-down lists of Volvos. It allows somebody to see the full lineup, which for Volvo is important because we have expanded our lineup significantly over the last few years.
We went from essentially a 4-product line company to a 9, 10, 11-car line company. We've also been going through a nomenclature change over those past couple of years.
To get the message across about the breadth of models that Volvo offers has been important to us, to communicate to people, "Look at this full range of cars that Volvo offers. Look, there's new styling at Volvo that maybe you weren't aware of before. The virtual showroom was quite important for us."
Berkowitz: That's got to be a big shift for the consumer mentality, when they think they know Volvo cars and can list the cars off the top of their heads, and now all of a sudden there are a lot more options.
PB: That's exactly right. You can always say, "boxy wagons," but we have multiple wagons, we have cross-over vehicles, we have sedans, all with entirely new style.
Berkowitz: And you've got a convertible.
PB: And we've got a convertible, and oddly, the convertible is the oldest car in our lineup. That one's only about four or five years old. It just gives you an indication of the degree of change we've had at Volvo. Being able to present our vehicles in a sort of online showroom environment on MSN has been very important to us.
Berkowitz: How were you able to tell that version 1.0 and the things you've been doing so far were successful enough that you want to keep doing them?
PB: One of the reasons Volvo's been consistently successful and in the forefront in things online compared to our automotive competitors is because we do back up everything with very specific metrics up front.
When we went into the Digital Garage concept, we identified right up front what it is we were trying to measure, such as measuring how long somebody's engaged with the content, usage patterns, click-through patterns, watching the behavior and ultimately, what has the impact been of those users on sales with sales matches. Across multiple metrics, we've been able to prove out that the concepts work for Volvo, although we're not releasing those specifics right now because it is competitive information.
Berkowitz: Are those all internal metrics you track yourself, or do you bring in any third parties?
PB: We get the tracking that comes from MSN themselves, which we believe. A click-through's a click-through.
But there are a lot of ways we can back it up with metrics on our own side. All of our Web sites are backed up with a fairly complete suite of metrics, and by basically watching the usage patterns of somebody's who coming to our site from an advertisement on MSN or coming through the Digital Garage, who is that person, tracking the anonymous session, giving them the opportunity to opt in to communications, which means at that point we can know exactly who this individual is, ultimately doing sales matches against those people who have come in from MSN.
