Carmakers love the clicks and chatter that a Facebook presence generates — but how many of those clickers are just tire kickers?
Automakers love marketing on Facebook. They share videos, photos and chatter with millions of fans of their brands. But converting Facebook fans into paying customers? Well, that’s a work in progress.
Social media experts say companies need to see Facebook less as a retailing tool than as brand advertising — creating word-of-mouth advocacy and affinity for brands. That hasn’t stopped some automakers from using sales tactics on the online community.
A few examples show why marketers are tantalized by the sales potential of Facebook:
- Jeep’s 2.7 million U.S. Facebook fans convinced the brand to offer its Altitude edition on all vehicles this year rather than just on the Grand Cherokee.
- Audi is selling its racy TT RS coupe here as well as in Europe because 12,000 Facebook fans signed a petition pledging to plunk down $50,000 if Audi would bring it.
- At the dealer level, an “employee pricing” advertisement posted on the Facebook page of Rick Case Honda in Davie, Fla., resulted in 100 cars sold the first weekend of June, said Richard Bustillo, the dealership’s general manager.
- Fiat is using an old-school marketing technique — coupons — in an effort to convert those who click the “like” buttons on its Facebook page into paying customers.
“We’re asking what our efforts are worth in ROI” — or return on investment, said Casey Hurbis, head of advertising for Fiat in North America.
After Fiat surpassed 500,000 fans on Facebook in February, it offered each of those fans a $500 coupon on a Fiat 500 subcompact and a chance to win one of 12 500s by using a code at a Fiat dealership. In early July, after the coupons expire, Fiat will know whether the coupons and contest moved the sales needle, Hurbis said.
“We know we induced some dealer traffic,” Hurbis said, adding that “it was an opportunity to gauge the return on investment in the social media space.”
For most brands there’s a mix of encouraging results and frustration as executives explore the potential of Facebook marketing. And the relatively low cost of social media marketing relieves some of the pressure on marketers to harvest sales from Facebook. General Motors recently signaled its dissatisfaction with a related aspect of Facebook marketing — paid advertising and sponsored content— by yanking a $10 million budget.
Sponsored content is the practice of paying Facebook for better placement of News.
FEED ITEMS ON FANS’ PERSONAL PAGES
GM said it plans to add the $10 million — and possibly more — to the $30 million a year it already spends to create free content for Facebook pages, which it deems more effective.
“We will continue to have a huge content presence on Facebook,” a GM spokesman wrote in an e-mail. “We expect to significantly increase our spending on Facebook content. We’ve had great success engaging customers and fans on our product and brand pages.”
GM’s $30 million for Facebook is a small portion of the automaker’s $1.8 billion U.S. advertising budget. Owen Peacock, Scion’s manager of marketing communications, said that just because a company has 1 million fans, that doesn’t mean all 1 million will receive a company’s update on their News Feeds. Facebook’s algorithms and formulas don’t allow it — unless the automaker pays Facebook a premium. Honda is sticking with sponsored Facebook content, said John Watts, manager of digital marketing at American Honda. Honda’s recent Facebook activity launching the redesigned CR-V has contributed to five months of record sales, he said.
“We’re happy with what we’re getting,” Watts said, speaking last week at the TLS Automotive Social Media summit, a meeting of automaker executives and dealers in Marina del Rey, Calif. He said sponsored content is “worth it” for the increased reach Honda’s message receives.
Watts said that Honda’s Facebook spending is “modest” compared with GM’s $30 million Facebook budget.
Doug Simpson, Facebook’s manager of global marketing solutions, said companies need to approach Facebook as a branding investment and shouldn’t expect an immediate boost in car sales. Engaging loyal customers leads to word-of-mouth awareness and recommendation that other forms of advertising cannot buy, he said.
Facebook is also a useful source of data, Simpson said. A new analytics platform on Facebook will give advertising partners access to the behavior and “likes” of those who follow their brand. That will allow auto marketers to produce more targeted content and contacts in the future, Simpson said. For example, say a Facebook member changes his or her educational status to “graduate.” Facebook can forward that information to an automaker or dealer — for a fee. The automaker or dealer can then notify the member of a college- graduate cash incentive currently in place.
VIRAL DARTH VADER
Volkswagen of America has enjoyed huge social media growth, in part from the little Darth Vader commercial for the 2011 Super Bowl.
Before the commercial went viral on Facebook and YouTube, VW had fewer than 400,000 Facebook fans. Today the number is 1.1 million, said Charlie Taylor, VW’s general manager of digital marketing. Now VW is trying to guide conversation on particular topics, Taylor said. His goal: to subtly tie VW vehicles to social issues, such as safety and the environment.
This winter the company had a regular cadence of news items and questions on product safety. The conversation this summer is on the environment, stressing VW’s clean-diesel technology, Taylor said. VW tees up the topic and lets fans run with it where they want, he said.
Ford Motor has 70 Facebook pages to foster chatter about its products, said Scott Monty, Ford’s head of social media. Ford views Facebook as a place where vehicle owners and friends can be heard. To encourage engagement, Ford, like other automakers, posts daily material on its corporate Facebook page, Monty said.
Such items included the news this year that a credit ratings upgrade had earned back for Ford the Blue Oval that had been put up as collateral on loans years earlier.
About 8,000 fans stepped up to “like” the item.
So the fans are there and engaged. But turning that engagement into sales? That’s the hard part.