On-Demand Automobile Marketing: Coming to a TV Near You

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Includes: DDAIF, F, GM, TM
by: Jonathan Liss

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Baby, You Can Drive My Car -- Via Television

  • Summary: At a time when marketers are questioning the value of traditional television commercials, a variety of virtual showrooms are playing an increasingly large role in marketing automobiles. driverTV is the most extensive of these pay cable channels, featuring an unlikely approach to showcasing new cars. Instead of glamour shots of vehicles bounding over desert terrain, driverTV showcases three-minute videos of new cars and light trucks taking the exact same turns, making the same stops and driving at similar speeds. The service makes money from car makers who pay to have their models displayed on driverTV and from consumers who pay for the channel. General Motors (NYSE:GM), DaimlerChrysler (DCX) and Ford Motor Co. (NYSE:F), were among the first companies to sign up, although Ford initially featured just a few models. Now Toyota Motor Corp. (NYSE:TM), Porsche, Jaguar, Hyundai Motor Corp. and Suzuki Motor Co. are joining the service. By the end of the year, driverTV will feature 75% of all U.S. models. In addition, many car companies are starting their own versions of driverTV. In April, GM launched a video-on-demand service which showcases more than 60 GM models. Ford has also looked into starting a similar service for potential customers.
  • Comment on related stocks/ETFs: Marketing guru Carl Howe has lots to say about the decline of traditional TV marketing and advertising methods. He recently addressed TV advertising's ongoing decline and the ways major U.S. companies like Coke (NYSE:KO) and Johnson & Johnson (NYSE:JNJ) are increasing their non-traditional advertising budgets to as much as 20% of their total marketing budgets - at the expense of traditional TV advertising.

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Tagged: , Auto Manufacturers - Major
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