Ford Finds Its Cool Selling the Hot Fiesta

I have a friend—we'll call him Ted—who is perfect for the new Mexican-made Ford Fiesta, which will make its debut this summer.

Ted's wife (we'll call her Betty) would also dig the Fiesta. Both are big-time geeks—think of a home crammed with flatscreen TVs and Apple everything; if it's a gadget, they own it or want it. Ted and Betty own a Scion and a Subaru and are solidly middle-class, late-twentysomethings. Oddly, the reason they and the Fiesta make so much sense together is barely about the car.

It's a great car, really. (More on that below.) But Ted and Betty are mistrustful of U.S. cars. Their parents were, too. They are not universally skeptical, however. They are avid, voracious consumers of both tangible products and of culture. They love social media. They love TV—mostly reality TV, which they watch on their own schedule—on Hulu or downloaded from iTunes.

In other words, they are much like the rest of the U.S.—mistrustful of all that is mainstream and formulaic—and also like a certain subset of car buyer whose parents soured on domestic vehicles and who, as kids, never sat in a Buick and whose only previous real exposure to a Ford (F) car was in the backseat of a Crown Vic taxicab.

Enter a new Ford model, the company's first in over a decade that needs to attract just such a young, hip, media-shy, marketing-averse consumer. To reach that consumer, Ford decided against using a mainstream advertising campaign. It didn't just want to blanket social media sites such as Facebook because who wants to "friend" a car? No, Ford needed a different approach. It reached out to prime movers—also known as influencers—on Facebook and Twitter—to laud the Ford Fiesta's virtues, which led to creation of the Fiesta Movement a year ago.

bold, word-of-mouth prerelease

The Fiesta Movement is a viral marketing campaign in which Ford gave away 100 Fiestas (the subcompact, so-called B-segment car already existed in Europe) to "social agents" who would be willing to make and post movies on YouTube, take photos, blog, tweet and otherwise spread the gospel of Fiesta-ness as wide as possible.

What's interesting here is not that Ford co-opted people to drive its cars and spread its message, but that Ford was willing to take the risk. This, it turns out, was a stroke of brilliance. Think for a moment of how tightly controlled messaging is from most brands. Even über-hip Apple (AAPL) wouldn't dare prerelease the iPad to 100 contestants to let them test-drive the product—for an entire year before its debut date—and blab to the world about it. Imagine what they might say?

For the Facebook and Twitter generation, one in which the line between self-marketing/branding and privacy hardly exists—especially for the most extroverted millennials—word-of-mouth is often considered far more trustworthy than the old-line, top-down approach. Ted and Betty don't trust a restaurant review, but they trust Chowhound.

Same goes for the Fiesta, kind of. If the people in these homemade videos think it's cool, and they mirror Ted and Betty's sense of self—Ford thinks the $13,995 car will appeal to twentysomethings, urbanites, and empty-nesters, so the with-it/fashion factor is expected to weigh heavily on buying decisions—then maybe it actually is a cool car. Maybe Ted and Betty ought to pay attention.

Attention has been paid, big-time. The Fiesta Movement campaign generated 6.2 million YouTube viewings; 750,000 clicks on Flickr; 4 million Twitter impressions. Earlier this month, Ford reported that it had 10,000 reservations for the car and expected a "conversion rate" (to sales) of 10%, which is pretty good for an econobox that won't even see delivery until late summer. That conversion rate would be far greater than you see for most prereserved vehicles in the U.S.

The Ford Fiesta even uses apps

The bigger deal for Ford, and for Ted and Betty, is that 30% of those hand-raisers were under 25 and 83% of them were new to Ford. Bingo: A marketing campaign that cost Ford next to nothing and massively raised awareness of the Blue Oval among millennials is precisely what Ford wanted out of the Fiesta launch. Even if it had spent millions, the company might never have achieved what it has wrought by social media alone.

Ted and Betty wouldn't get out of their Scion and into a Fiesta if the car couldn't continue what Ford started with Fiesta Movement. That is, it needed to be more than just a fun and funky subcompact. It needed to fit that very techno-savvy lifestyle. Which it does: Like Ted and Betty, the Fiesta uses apps.

When equipped with Ford's SYNC voice-activated communications-and-entertainment system, the Fiesta can stream your Pandora favorites directly from a Blackberry or Droid.Via the same smartphones it can stream podcasts from Stitcher. (For the uninitiated, Stitcher is an aggregator of all nonmusic podcasts, letting you stream on-demand rather than having to download and store podcasts); it can even read your Twitter feeds to you via a simulated voice if you download a service called Open Beak to your phone.) There's more coming: SYNC was at the most recent Consumer Electronics Show; with developers working solely on apps for SYNC, a car for a younger demographic is an obvious target.

So the ADD generation apparently has a car targeted directly at it. How is the car?

First, it comes as a five-door sedan or a five-door hatch. The hatchback model is more attractive by far, although both are good-looking, modern, and come in several very bright colors that will attract attention. (That palette could look dated quickly.)

cheap, practical, slick, and sporty

As you may have guessed by the diversity of the SYNC system alone, the Fiesta will come with a huge options list—more than the competitive set of the Honda Fit or Toyota Yaris, and more even than what you find in the next size segment up, such as the Civic (optional features such as heated leather seats, keyless entry, and a push-button ignition). Standard features are also impressive, including seven airbags and stability control. The competition doesn't match.

While Ford will surely lose some buyers to the larger, more pragmatically focused Fit, this car is cheaper than even the base Mini Cooper and more practical, too. It's also just as slick inside (blowing away the Yaris), with soft-touch materials throughout. Only the Fit gives it a run, for the fluidity and logic of its button location. A six-footer can't comfortably squeeze into the Fiesta's rear seats for very long, but kids will be content in the second row and the driver and passenger seats are supportive and sporty.

Sporty's the operative word here. The 120hp, 1.6-liter, in-line, four-cylinder engine is a hair gutless, but no more so than you find in the rest of this class, and the five-speed gearbox is tall-geared for quieter highway cruising and superior mileage. Yep, the Fiesta should get 30mph city/40mph highway fuel economy (our tester got 32mph in some very hard driving), which is superior to the Fit (27/33) and the Yaris (29/36). One trick deployed here, as well as in other cars in this class, is electric power steering, which can feel disquietingly disconnected from the road. The Fiesta's steering is superb, precise, and taut. As is the suspension, which some testers found a little too firmly sprung, but they would belong to that class of consumer we'll call "olds."

For the target driver, the Fiesta is perfect. It's a reasonably priced, enjoyable, economical car. More important, this may be the car that permanently changes Ford's culture. That's already happening on the product side, with great vehicles such as the Edge and the Flex. This car will bring thousands of much younger buyers into the Ford tent. If the company is smart, it will learn from this experiment that it's not just about good product. Ford needs to let this younger customer talk up the food chain to it. Executives need to listen. That's mandatory: The good thing Ford fell into with the Fiesta will only lead to better things down the road if it learns that lesson.

Before it's here, it's on the Bloomberg Terminal.