How Mazda's marketing evolved from company-centric to experience-driven
The brand's VP of Marketing is bullish on digital's ability to help it tell engaging stories.
Over the past few years, Mazda has successfully evolved from company-centric to experience-driven marketing, with digital now accounting for more than 40% of its spend while loyalty, search interest, video views and sales are all growing.
While still a relatively small player, with less than a 2% share of global auto sales, the 97-year-old brand has nevertheless been through its fair share of ups and downs. After the Great Recession hit and auto sales industry-wide collapsed, the company's leaders knew it was time once again to come up with a new plan for moving forward, one that involved offering unique products supported by more innovative marketing and sales techniques. As part of the new strategy, Mazda is focusing on a tightly targeted group of passionate drivers and weaving stories that create an emotional engagement. Digital is a key component, which includes video and content pushed out across a number of different platforms.
"We realized we needed to redefine how we engage with our customers, using modern day tools," Russell Wager, VP of Marketing at Mazda, told attendees at the Interactive Advertising Bureau's Annual Leadership Meeting during a presentation on Tuesday.
"Customer engagement is the new frontier and digital is the best way to reach today’s connected customer," he said.
A new landscape
Following a reevaluation several years ago of how the brand goes to market and how customers to want to engage with their company, Mazda recognized that the landscape is changing. Today, 75% of auto shopping is done online and consumers in-market for a car visit only 1.2 dealerships on average. Five years ago, they visited more than four dealerships before buying. Additionally, 65% of all traffic to the U.S. Mazda Web site now comes from a mobile device.
Wager recalled that when he joined the company four-plus years ago, Mazda was reliant on broadcast TV advertising, even though analytics clearly showed the brand would see a higher return-on-investment (ROI) by shifting their budget to emphasize digital. After increasing the digital budget from 10% to 30%, good things started happening, including increases in sales and loyalty. Today, more than 40% of the budget is in digital.
But, Mazda recognized that success going forward was about more than budget allocation. The brand also needed to be able to make an emotional connection.
"Our key challenge today is how to connect our products to an experience, an emotional value," Wager said. "What is the story that does this for the audience we want to reach?
"We set out to transform ourselves from company-centric marketing to consumer-centric marketing or more simply to be an experience provider," he continued. "But how do we communicate that quickly and most effectively?"
Psychographics over demographics
The foundation of Mazda's customer-centric approach is its targeting approach, which eschews demographics in favor of psychographics. This approach enables the brand to focus on customers who hold a series of attitudes towards driving that suggest they are passionate about the driving experience.
"It might seem limiting, but 16% of all new car customers share our passion for driving," said Wager. "We just need to find them and connect with them."
To help it engage with the right potential customers, Mazda leverages the Oracle Data Management Platform to identify customers with the right psychographics and then find them across the web, including on new platforms such as Snapchat. New tools and distribution channels are enabling Mazda to move from distributing ads to distributing its story, per Wagner.
One example of the new storytelling approach is a 30-second ad from 2015 that quickly moves through the many stages of one person's life, showing different Mazda vehicles as part of each. The ad has close to 11 million views on YouTube.
Another is a new three-minute video that depicts how important car racing is to a wide range of people involved in the sport, reflecting a proactive role in motorsports for Mazda that includes offering a race — MX-5 Cup — that sells for $58,900, a price meant to make racing accessible to a wider range of enthusiasts.
Accelerating past banner ads
Beyond digital video, Mazda recently used organic and native formats and inspirational pieces of content instead of banner ads for the launch of its CX-9 SUV.
On the social front, Mazda held The Ice Academy in Crested Butte, CO, where drivers could test drive vehicles featuring its new i-Activ AWD system on an ice track, experiences that were then shared on social media.
Mazda is also innovating on the sales front, recently offering its most loyal customers exclusive access to preorder one of only 1,000 MxRF 5 cars with a retractable back. Using CRM, social and digital, Mazda drove interested customers to a landing page only they could access. The limited-edition car sold out in one week.
The strategy is working. Mazda's search interest is up 25% year-over-year, putting it among the top-growing auto manufacturers, per Wagner. Additionally, subscribers to Mazda's YouTube channel are up more than 325%.
Another promising result is an increase in the average annual income of Mazda's customers, who are also more educated than they were previously. Loyalty has increased as well, although it still falls short of industry averages.
Just as importantly, Mazda is attracting 33% more of the customers that fit its desired psychographic profile than it was four years ago. The only other car brands performing better with these consumers are luxury ones, per the exec.
As a company used to reinvention, Mazda is also already looking toward the next reiteration of its marketing strategy, which will focus on brand value management, with all areas of the company working towards delivering Mazda's unique values to customers.
"When you purchase a vehicle, other than a house, it is the single largest purchase you are going to make, so you are not going to take it likely," Wager said. "You want to know the family you are buying into.
"That is the story we have been trying to tell over the past several years — when you join the Mazda family by purchasing a car, you get more than the just vehicle. You get to be in this semi- exclusive club. We are fine with the size we are. We want people to be happy."