According to sources at leading advertising agencies, last year India’s top automakers, including but not restricted Hero MotoCorp, Maruti Suzuki, Mahindra & Mahindra, spent more than Rs 2,600 crores combined on their digital marketing campaigns. This also includes the amount spent during the 2016 Auto Expo held in February last year.
Digital marketing is the all-mighty gateway between electronic technology and marketing psychology, asserts Cory Firth, a renowned marketing expert. And Indian automakers are adhering to it quite seriously, so much so that they have almost doubled their spent on digital marketing in some cases and social media becomes the most important among all forms of digital marketing.
In 2016, the auto sector contributed to 8.2 percent of the overall spending in digital marketing which is much more than other major sectors like real-estate, telecom, retail, e-commerce and banking.
Today digital media has emerged as a prime driver in defining purchase decisions especially within the auto sector where almost 70 percent of the touchpoints in the purchase journey are digital, said Sanjeev Handa, Vice President, Marketing, Maruti Suzuki.
The country’s largest carmaker MSIL asserts that with continually evolving consumer preferences and emergence of new social media platforms and advertising formats, it has consolidated and amplified presence on this platform. Rightly so American marketing consultant Jay Baer says: content is fire, social media is gasoline.
Search frequency of key words around Maruti Suzuki on Google has grown by 89 percent in the online organic traffic in last one year and Maruti Suzuki has seen a steady increase in its community size on social media. While Mr. Handa, VP, Marketing, Maruti Suzuki did not share the budget and spending towards the virtual world, but it did say that “…in last two years the digital spends have almost doubled and we see digital marketing playing a significant role in our business.”
Overall, digital advertising accounted for over 12.7 percent of all advertisement spending in 2016, which is up by over 9 percent when compared to 2015 as per GroupM, a part of global advertising group WPP Plc. Companies are willing to spend record amounts in advertisements and promotional activities to generate enough buzz around the product, feel advertisement industry experts.
Digital marketing for us till last year was less than 5 percent but this year we will be taking it beyond 10 percent of the total marketing expenditure,said Roy Kurian, Vice President, Sales & Marketing, India Yamaha Motor.
Two-wheeler makers find digital marketing more effective. The local unit of Japanese firm, India Yamaha Motor has doubled its expenditure on digital marketing. The auto industry is also second largest advertiser commanding about 21.7 percent of the country’s overall advertising capex. The challenge before the automakers these days is to address a successful way to communicate about their product innovation, technology and features creatively to catch the customer’s attention.
The most popular methods on digital platform that automakers are adopting include mobile-based virtual showrooms, live web-cast of launch events, pre-launch digital campaigns, contests on social media and video-based short teaser campaigns to spike the customers’ interest in new products.
Today’s buyers are far more knowledgeable about the range of products available within their budget, through an increase in the number of auto websites and mobile apps. A CMO Council media report states that over 23 percent, or 1 in 4, car buyers refer to websites and watch or read reviews before buying their car.
A vehicle’s popularity on social media has become one of the prime factors of consideration for consumers. The report also claims that clicks on auto ads on social networking platforms like Facebook have increased to over 40 percent in 2016 over 2014.
However, automakers believe that the paid per click is quite broad term. It always depends on the overall Business Objectives of various companies. These objectives are translated in form of Key Performance Indicators (KPI).
“All campaigns offline or online are based strictly on achievement of these KPIs. As a part of execution process, PDCAs are conducted for course correction and tracking,” according to MSIL.
The use of innovative marketing strategies such as Facebook Live, Periscope, live webcast on YouTube helped to generate enough buzz for ‘Auto Expo 2016’ that it was among the top five news trends for the year 2016 on Google.
Jnaneswar Sen, Sr Vice President – Marketing & Sales, Honda Cars India (HCIL), said that the importance of digital media is continuously moving up every passing year.
Whatever the annual marketing budget we have, the allocation on digital market is increasing year-on-year basis. The main advantage of digital marketing is that the impact is measurable much more accurately compared to other… while you have a lot of opportunities to innovate.
HCIL has increased its digital marketing expenditure by 50 percent this year. Last year HCIL spent 7 percent of total marketing expenditure on digital, which is expected to increase to 10 percent this year.
The automakers are also trying to connect their dealers on their digital journey which helped in increasing their presence on digital. In the case of MSIL, the digital tool helped increase the test-drive by 145 percent in the test-drive leads captured on the website. Additionally, the integrated website gave the company a platform to cross sell and upsell its products to the customers.
Automakers also use the digital platform to engage with their existing customers to celebrate important milestones. For Swift’s 10th year anniversary celebrations, Maruti Suzuki connected with its over 1.3 million customers using its social media network. “The campaign witnessed a total of 1245 submissions with an online reach between 2.1 million and 2.5 million impressions,” the carmaker said. The auto-industry — especially car, SUV and two-wheeler manufacturers — are followed the most on social media.
According to Sumbly, Triumph has increased its share to digital marketing from 5 percent of the total marketing expenditure three years ago to 20 percent now.
Data shared by Twitter indicates that over 2.9 lakh tweets were generated about the Auto Expo from February 2-9, 2016. The brands that led the social conversation on Twitter with the highest engagement were Tata Motors, BMW India, Audi India and HMSI.
“For luxury brands, digital marketing becomes even more important as it reaches out to niche customers. As a luxury and premium motorcycle brand, we cannot do mass advertising like print, TV because we don’t address all the audience. So, digital is becoming a new set of advertising module as you can select your audience based on demography etc,” said Vimal Sumbly, Managing Director, Triumph Motorcycles India. Triumph bike price ranges between Rs 6 lakh and Rs 22 lakh.