Do you know which is the top-selling car in the world? Which is the top-selling two-wheeler in the world? Only a few might get the right answer. However, many will have an obvious common answer to the following questions – Which is the fastest production car in the world? Which is the costliest car in the world? Even though the answer may not be accurate, one brand could stand out. This is the true power of marketing.
The first automotive ad dates back to 1895, almost 10 years after Karl Benz built his first horseless wagon, a three-wheeled vehicle with gas engine operation. Ads back then focussed on the benefits of replacing the horse with a more easy-to-maintain and easy-to-operate machine. Coming to some of the modern marketing campaigns, they seem to be following a template with a few drone shots of the exterior and quick jump cuts of the interior features. They all seem to be focussing more on their brand image rather than what the product delivers. Most of the two-wheeler products are forced with a ‘sporty’ aspect in their product, even if it is a low-powered urban scooter.
Does brand image hamper innovation?
The purpose of a marketing campaign has always been to address a need and deliver the solution through a product or a service. But, what if there is no ‘need’ or ‘problem’ to be addressed and the solution being offered is not the most viable one? That is when a campaign misfires. This was evident from 2018 to 2021, when car sales dipped from 86.05 million units in 2017 to 80.6 million units in 2018 and further to around 74.9 million units in 2019 as per some reports. In 2020, not just the auto industry but every other sector had COVID-19 to blame for the poor performance.
Look at the 2018 to 2019 period, when we did not have the pandemic to blame, yet global sales were declining. This was the time when ‘Woke’ culture was prevalent and gaining popularity across the globe. The EV sales were gaining grounds and the need for a more environment-friendly and high-mileage vehicle was rising. Yet, manufacturers were spending more on portraying themselves as the creators of some of the most thrilling fuel-guzzling driving machines.
Ever since the advent of auto advertorials, speed has been and will continue to be one of the most important aspects for an OEM brand. That is why even a street motorcycle is shown to make stylish moves and remarkable agility, on a race track. From replacing horses to achieving triple-digit speeds faster, speed is the perennial factor in the auto industry. However, this is becoming the biggest blot for the entire automotive industry.
What brands don’t tell but still sell
According to WHO records, approximately 1.35 million people died in road accidents in 2021. It further observes that overspeeding is one of the major causes of most of the fatal accidents across the world. As per studies, an increase in average speed increases the probability of a fatal crash. To be more specific, a 1 percent increase in the mean speed could increase the risk of a fatal crash by 4 percent.
As per a recent report by Border Road Organisation (BRO) of India, the country has the second-highest number of road accidents and the highest number of deaths globally. This is the country with the largest two-wheeler market in the world but sadly, the lead cause of major road fatalities. Speed is the main cause of death for people aged 15 to 49 globally, the prime consumers of the automotive industry. In spite of all this, we see an increasing number of advertisements from Asian OEMs, brandishing themselves as the makers of the fastest two-wheelers of their respective industries. This is hitting a curb due to government intervention and annual sales charts.
Government’s life-saving speed breakers
Australia passed a law to make the Anti-Lock Braking System (ABS) in vehicles mandatory in the year 2003. UK and Indonesia passed similar laws and made it mandatory in 2004. The US made it mandatory in 2011. China and India made it mandatory in 2019 while Thailand has made it compulsory for all new vehicles from 2024.
After the government started giving priority to road safety, automotive manufacturers started to pitch the safety standards of their products more. This is when the name NCAP (New Car Assessment Program) started becoming popular. With Bharat NCAP being the 10th and the latest Global NCAP to be added, automobile brands have turned their latest Ads into road safety pioneers of the industry.
Today, in the automotive industry, brand value is measured by product quality. We no longer see marketing campaigns surrounding high-speed street stunts and outright highway performance. The few who do it, demonstrate it on a race track. Automotive OEM manufacturers are not chasing speed anymore, be it in two-wheelers or four-wheelers. They are investing more in assuring safety and the technology related to it. A case in particular is of a prominent car brand that is part of a large industrial conglomerate in India. The day it was announced that it had the country’s first 5-star rated SUV in the country, its sales jumped multifold, making it the top-selling SUV in India for that year.
Medium matters over Message
Hiring the best drivers and commercial directors means a lot if the message is reaching the right audience. Reports suggest that there is around 23 percent decrease in the budget for TV commercials from the Global Auto industry for 2022. Most of them have switched their focus towards streaming services and several online platforms in image and video formats. In 2021, print continued to dominate the Indian automotive industry’s advertising budget at 45 percent followed by television (28%) and digital ads (20%). According to another report, the Chinese automotive industry spent over 60 percent of its Adex on middle-class cars while the high-end automobiles saw Adex of just around 13 percent in 2020.
The automotive online advertising market is forecasted to grow at a CAGR of 16.2 percent from 2020 to 2025. At the same time, another report suggests that the global automotive giants are reducing their ad spend. The total share of ad spend by global automotive brands among other sectors globally has reduced from 10 percent in 2013 to 4.8 percent in 2022. Print media has seen one of the biggest drops from USD 8 billion in 2016 to less than USD 2 billion in 2022. In the age of Digitalization, spending on digital channels has increased and Instagram is predicted to earn the most from automotive investments in 2023. North America, the largest market for automobile advertisements is shifting its expenditure towards search and social. While the investment into video formats still accounts for more than 40 percent of the spending, local radio and online streaming portals are swiftly increasing their size of the pie.
In an age where car manufacturers have started buying stakes in online social media companies, history will document the biggest market voice and the biggest market share. Media owners are hopeful that it will turn out to be the same brand for both to set the strategy for the next marketing game.
Article by Ujal Nair