Dispatch from Brazil: Navigating Revolutions in Media and the Car Industry
“The most important question today is how much do people want to own a car? In the past, many wanted to have a car. But when you think about the collaborative economy, in the near future, I cannot see the car there.”
Alexander Greif, General Marketing Manager, Citroën Brazil, is leading the marketing of the Paris-based carmaker through the effects of the digital revolution on advertising, and on the car industry itself. Two years ago, the majority of his team was dedicated to traditional media. Today, in response to the massive adoption of digital and social media in Brazil, his team is half the size and digitally-focused. As for tomorrow, he foresees tectonic changes to come, as buyers become more digitally-dependent, migrating their shopping behavior online, and even choosing digitally-enabled car sharing instead of ownership. With IAB, he speaks candidly and in detail about these changes.
Q: Over the years, how has the vibrant adoption of digital media and technology in Brazil changed what you do?
A: It changed everything. My whole media business model—even my team—changed completely in just two to three years. I used to have a six-person team, with four of them responsible for offline media: media budget, offline production, regional advertising in media, and so on. Today, we have a completely different approach, and a completely different structure. Now I have just three people, and for all of them, most of the focus is on digital. Our budget today is split 50 percent for digital and 45 percent for “open” TV, meaning those channels that don’t require a subscription. But [most] other automotive players still have their investment concentrated in open TV. I just use open TV today for launching cars.
Q: How do you spend that investment in digital?
A: On everything. We have two different business units. The first one is a branding business unit. Today, this business unit consumes around 30-35 percent of my digital spend. And the other business unit is the programmatic e-commerce unit. In this unit, I have one DMP, two trading desks with a DSP, two players focused on mobile for programmatic, and I have one player for video programmatic. Inside of the branding unit, normally I focus on reach and frequency players. Google [search] and Facebook are normally part of this, because they’re always on—it’s must do. Today, most of the sales that come from digital are concentrated on Google and Facebook.
Q: Today, for cars, as well as many other “big purchase” products, more of the sales cycle is taking place online. How does this impact your marketing?
A: When you notice the digital revolution taking place today in the purchase of a car, it’s very clear to everyone in the industry that the structure that we have today must be reborn. The roots of this industry are still in the oldest media and the oldest purchase [funnel]. We have a huge amount of dealers; we have the oldest salesmen style in the market. All these things must be reborn, because we have a maximum of 15 years with baby boomers and Generation X consumers. And the automotive industry was created for them. When you compare the oldest purchase funnel with the new one, the gap is really significant.
Of course, the automotive industry has already started working to change all these mindsets, and to prepare our sales team and our dealers to talk with this new kind of consumer. [But] today, it’s really hard to find a sales person already involved in this new digital native market. It’s hard to find someone that knows how to start the conversation through email, for example. This sounds like a simple [problem], but this remains difficult.
Q: Cars have become one of the first mass marketed items to become one of the Internet of Things. Have the interactive capabilities of cars changed the way you market them?
A: Definitely the car itself has become one of the first products, and the most interesting product, to include the Internet of Things concept. For society, interesting data and reflections could come from the interaction between cars and other technologies. When you have the Internet of Things inside a car, you can work with interesting social KPIs.
But, in terms of the business, this is not the point. The most important question today is how much do people want to own a car? In the past, many wanted to have a car. But when you think about the collaborative economy, in the near future, I cannot see the car there.
Q: You can’t see the car itself?
A: I can see the car. But not like a property, more like a tool. When you see the evolution of Uber, or when you hear people talking about the inconvenience of the car in an urban structure, it’s a central question. Because if this new, next generation of consumers prefers not owning cars, how do you handle all these giants in dealerships?
I have seen General Motors launch a car sharing service. I have seen, for example, Citroën in Europe buy car-sharing services. Maybe, these services will become more relevant than the product itself.