Italian Soccer Match Drowned in Auto Ads as Buyers Vanish

When Juventus took on Lazio in a marquee soccer match last weekend, Italian television viewers also witnessed another high-stakes clash: a battle to win over increasingly scarce car buyers.

Volkswagen AG (VOW), Renault SA (RNO) and Fiat SpA (F) are among the seven auto brands that bought ads during the 15-minute halftime break. Cars dominated advertising before and after the match, too, as the manufacturers push for market share even in Italy, where demand is heading for a 33-year low.

Open a European newspaper or magazine, scan billboards across the region, or visit a website aimed at readers there, and the story is the same.

Contrary to an overall decline in European ad spending, the auto industry through September forked out 3.9 percent more money in Germany, the U.K., France, Italy and Spain -- the region’s biggest markets, according to data from consumer research company Nielsen.

“Carmakers are pushing ads as much as possible to conquer any potential buyer in a market that’s getting smaller and smaller,” said Andrea Boaretto, a marketing professor at Milan Polytechnic’s business school. “The risk is that consumers get overloaded by car commercials.”

This year’s marketing budgets aren’t a one-off increase. The auto industry has boosted ad spending since the global recession in 2009, even though demand in the region is headed for a fifth straight annual decline, to its lowest level since 1995. Last year, carmakers spent 8.2 billion euros ($10.5 billion) on traditional media ads, 14 percent more than they did two years earlier, according to Nielsen.

Contest for Celebrities

The hunt for an edge has even spilled over to contests for the allegiance of celebrities. To promote its i electric-car brand at an event this month in New York, Bayerische Motoren Werke AG (BMW) recruited “Pulp Fiction” star Uma Thurman, who last year appeared in commercials for Alfa Romeo’s Giulietta hatchback.

“Brands compete even more fiercely for their share of static or declining markets,” said Ian Rotherham, global account director at MediaCom, an agency that handles ad placement for VW. “Next year will be tough.”

PSA Peugeot Citroen (UG), which secured government guarantees to shore up its ailing auto business and is planning to cut some 8,000 jobs, has continued to spend to maintain its image with consumers.

“What we want to preserve is our visibility,” said Guillaume Couzy, head of marketing at the Peugeot brand. “We don’t want to relax the pressure.”

Promoting Incentives

In addition to plugging new models and raising awareness, incentives played a key role in ads featured during the Nov. 17 Juventus-Lazio match as pricing becomes a focus in crisis-hit Europe. In Italy, Fiat is offering rebates of as much as 5,000 euros on natural gas-powered versions of the 500 and Panda models.

In Germany, General Motors Co. (GM)’s Opel brand is promoting a 30-day money-back guarantee in a campaign featuring Juergen Klopp, the popular coach of the Borussia Dortmund soccer team. Customers who buy or lease a car can give it back if they’re not satisfied and have driven less than 3,000 kilometers (1,865 miles), according to the program.

Dealer discounts in Germany surged last month to an average of 12.5 percent off the list price, the highest level in more than two years and up from 11.1 percent a year ago, according to trade publication Autohaus PulsSchlag.

“We are seeing carmakers advertising prices in Germany in a way unseen previously,” said Olivier Korte, media director at Zenithmedia, which manages the marketing budget for Toyota Motor Corp. “Value for money at the moment sells best. This trend will go on.”

Hyundai’s Mark

Hyundai Motor Co. (005380)’s image of offering solid design and features at a reasonable price has helped it capture 3.4 percent of the European auto market in the first 10 months of 2012, compared with 2.9 percent a year ago. That image has been shored up by spending on big events like sponsorship of the European soccer championships this summer.

With the auto market forecast to decline again next year, the Korean carmaker is looking to maintain its position rather than push for growth in 2013, said Mark Hall, Hyundai’s head of marketing in Europe. Regardless, the crisis has left its mark on automotive advertising strategies, which have become more sales- focused than in the past.

“Not that long ago, when carmakers launched new models, they would concentrate 100 percent on brand-led messages for the first 12 months,” said Hall. “Now, brands introduce new models, and in a matter of weeks, you see price and offer messages.”

To contact the reporters on this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net; Christian Wuestner in Berlin at cwuestner@bloomberg.net; Mathieu Rosemain in Paris at mrosemain@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.