Are auto shows under threat because of manufacturers opting to use digital marketing instead? Or is this merely a trend?
It happens to be one of hottest topics in the automotive industry because some manufacturers are choosing to skip North American shows or all shows globally, preferring to use their marketing dollars on multi-media technology to present their new products individually.
Whether or not it’s a fad that will eventually end, because things go in cycles, it has affected some of the biggest shows in the world. The Canadian International AutoShow, Canada’s largest annual consumer show and which has had soaring attendance in recent years, will be without three major manufacturers from last year. Mercedes-Benz, Volvo and Maserati are not participating, for various reasons.
Mercedes-Benz has chosen to skip all Canadian shows this year. Volvo has opted to pass on all auto shows around the world, although it has endorsed dealers in some areas of Canada that have auto shows to showcase cars individually. Maserati’s withdrawal pertains to the merger by Fiat Chrysler and Peugeot back in December.
This is not the first time the AutoShow has had manufacturers bow out, but some have returned the very next year.
Steve Bruyn, Chief Executive Officer of Foresight Research, which has gathered data on auto shows since 2013, including 56 in 2019, said manufacturers are making a mistake when they take a pass on these shows.
“I’ll never forget I walked into a manufacturer (two years ago) and I was meeting with the manager of auto shows and his staff and the first thing he said to me was: ‘Are auto shows dead? My management thinks so,’ and I wrote a paper with that title,” Bruyn said.
“No, they are not dead at all. In fact, they are so incredibly stable that it’s hard for me to even understand why top managements (of manufacturers) could even think that way.”
Virginie Aubert, Mercedes-Benz Canada’s Vice President of Marketing, said her company continuously evaluates their events portfolio to ensure that each of their initiatives provides the best opportunities to fulfill their strategic priorities.
“After careful consideration, we decided to no longer participate in Canadian auto shows as of 2020,” she said. “Mercedes-Benz Canada is hard at work preparing a series of programs in 2020 that will showcase our exceptional vehicle lineup and excite both Mercedes-Benz fans and new audiences. We look forward to sharing these events in the near future.”
Amanda Ignatius, Head of Corporate and Media Communications for Volvo Car Canada, said her company is always looking for new and innovative ways to showcase their products.
“You can still expect to see Volvo Cars participating in (some Canadian shows) where our local market retailers are working directly with the show organizers,” Ignatius said.
Conversely, Wolfgang Hoffmann, President of Jaguar Land Rover Canada, said his company continuously monitors the effectiveness of their marketing activities and the CIAS, Feb. 14-23, fits into that.
“The Toronto auto show will remain a key part of our marketing mix in 2020 and we will continue reviewing and choosing the best solutions to meet our customers’ needs,” Hoffmann said. “The Toronto auto show helps us reach consumers in Canada’s largest market and we are excited to have the Canadian debut of the 21 MY Jaguar F-TYPE and the new Land Rover Defender.”
Don Romano, President and Chief Executive Officer of Hyundai Auto Canada, said his company has spent between $2 million to $2.5 million for a new display and that the cost to annually refurbish a display annually is between $300,000-$500,000. He said the cost per square foot at auto shows ranges between $7-$14 depending on the show. But he said it is financially worth it, particularly for the CIAS, which is the largest consumer show in Canada.
“The AutoShow plays an important role in generating interest and demand for our products,” he said.
Bruyn said his company poled 6.5 million households in 2019, accounting for slightly more than 10 million people, and of those households 70 per cent were in the market to buy a car, amounting to 4.7 million buying decisions.
“This is a very, very big opportunity for any car company to prospect,” he said.
In his opinion, there needs to be some major education among manufacturers so they understand auto shows are hard to beat as a marketing tool.
“There’s a lot of concern about it (among auto show presentation) and there’s a lot of misinformation existing out there that is the root cause of this,” Bruyn said. “You go to an auto show and see the product specialists collecting names on their tablets. These folks are referred to in the industry as hand raisers. They gave their name and address and emails and things like that. The manufacturers are taking this information and creating files to say these are the leads we are taking from the auto shows that we were in. Then they come back and do a sales match, sometimes three, four or five months later, and they say ‘of all these leads, how many sales were made?’ And then they say that’s the value of auto shows – the return on investment.”
Bruyn said less than one out of three people that go to an auto show that subsequently purchase a vehicle are hand-raisers. Furthermore, he said the influence of an auto show lasts for 12 months from the end of one to the beginning of the next.
“When we look at people who are at the auto shows, 54 per cent say they were influenced by that,” Bruyn said. “They will also tell you they were influenced by digital, television and public relations. P.R. is very strong and events are much stronger than they used to be. They’re up 300 per cent compared to five years ago. But for the 54 per cent who say they are influenced by the auto show, that auto show is more important to those people than digital, believe it or not. It has more power than digital, and that’s a big group.
“So is (digital marketing) a threat? It’s probably a threat from a budget point of view. From the customers’ point of view, they want both. I think what will happen is some brands will pull out. They may not pull out of all of them, but they will pull out of some of them. I think that will happen and some dealers will get upset about it and some of these manufacturers will experience feedback from their dealer council and may reverse the decision unless they can demonstrate conclusively that the sales were unaffected by leaving the auto shows. But I don’t think that will happen. We measure how many cars are sold as a result of auto shows and it’s a big number.”
Bruyn said auto shows expose products to existing customers and potential customers, a strategy that goes back 100 years. He said auto shows are extremely effective in communicating the experiential feeling of the car.
“You’re talking about exterior space, styling (and) design, that still matters,” he said. “Those kinds of up front and personal experiences with the product is communicated far and away better by auto shows than anyway else. The digital experience is very good at communicating hard information. The auto show is better at communicating softer information and they both count in the purchase decision.”
The CIAS annually does its own research, but last year it decided to subscribe to Foresight’s report, titled 2019 Canadian International AutoShow Report.
Some of the critical data from the report include:
• 33 percent of show attendees added a brand to their consideration list within the next 12 months
• 18 percent of attendees bought a brand they were not considering prior to the show
• One in five buyers attended the show before their recent purchase
• The two most important criteria for displays were ability to access/sit in the vehicles, and having a specific vehicle of interest.
• Product specialists ranked more important than the image of the brand’s display to consumers.
• Learning about new electronic features was listed as the main influence to attend.
• Comparing and shopping before visiting the dealer was listed as the main influence to attend.
• The average visitor spent almost 4¾ hours at the show, more than an hour compared to the U.S. norm.
• Tesla rated highest of all manufacturers in most impressive displays, followed by Lexus. Maserati and BMW were next.
• Toyota, Honda, Acura, BMW and Ford were the top preferred brands among intenders at the show.
“It not only corroborates our (information), but even goes further than what our studies have shown,” CIAS General Manager Jason Campbell said.
“Having seen the data, this is something we will continue on an annual basis. When you look at that kind of information that gives guidance to consider that brand, it’s because a lot of things people are looking for are offered in those particular brand displays.”
By Perry Lefko / Special to wheels.ca