Race Is On for Luxury : ‘Bloody Mess’ Foreseen as $175 Million Is Budgeted for Ads in Japan’s Next Lap

In a few months, the Japanese car makers will be butting headlights over their new luxury car lines. And the first folks to get a glimpse of this marketing war will likely have grease under their fingernails. Or VCRs in their living rooms. Or both.

Those with the dirty nails are the auto buffs--whose turbocharged opinions often influence the cars the rest of us buy. They are eager readers of magazines like Road & Track and Motor Trend--which will soon be taunting them with “teaser” advertisements for Infiniti, the new Nissan nameplate, and Lexus, Toyota’s new upscale entry.

Those with the VCRs are some carefully selected import car owners that have caught the marketing eye of Toyota executives. Toyota, after all, has recently begun mailing videocassettes of its other upscale models to likely customers.

Moving faster than a speeding Celica into the U.S. auto market in 1989 is a lineup of upscale Japanese imports from Toyota and Nissan, as well as Honda. It is a major strategic move for Japanese importers, and it’s also shaping up as the biggest marketing story of 1989 in Southern California.

After all, the Southland is the U.S. headquarters for nearly all the Japanese car companies and home to some of the nation’s most avid import buyers. The U.S. marketing divisions of Nissan’s new Infiniti is Carson and Toyota’s Lexus division is in Torrance. Honda’s successful Acura division is in Gardena. Although only Infiniti is using a Southern California-based ad agency, the other two have hired ad firms with growing Los Angeles offices.

What’s more, the three car makers have budgeted a total of $175 million for this face-off.

“It’s going to be a bloody mess,” said Peter Stranger, president of the West Coast office of the ad firm Della Femina, McNamee WCRS, which handles advertising for Isuzu. “Everyone will be doing anything to get attention.”

Until now, these cars have been the auto world’s hush-hush equivalent to the Stealth bomber. Certainly their prices are in the stratosphere--up to $40,000. Three years ago, Honda entered the same market with its highly successful Acura models.

A total of $125 million in advertising will be spent by the Infiniti and Lexus divisions in just the first year. The figure is even more impressive when you tack on the estimated $50 million that Honda is spending at the San Francisco office of Ketchum Advertising, which handles its Acura ads. And these figures could conceivably double within the next few years. Together, they represent one of the largest chunks of advertising business ever to hit the West Coast.

Never mind that the new cars won’t be available for nearly a year. “With these ads they’re simply saying, ‘Hold on before you buy your next car. There’s something really neat coming,’ ” said Dennis Simanaitis, engineering editor of Road & Track magazine.

So what will happen to the ad campaigns when the cars really are available?

“Damn near anything you can think of is being considered,” said David Wager, president of Saatchi & Saatchi Team One, which is creating ads for Toyota’s Lexus. “The advertising has to convince people who spend $40,000 for cars that it’s OK to buy something new. People are not buying these cars for transportation. They’re buying them to stand out. But how do you stand out in a neighborhood like Palos Verdes, where every other car is a Mercedes or a BMW? Well, driving a Lexus model might be a way.”

Indeed, the secret to success may be this: the more unconventional the advertising the better. “If we go out there with our advertising that looks like Ford’s, Chrysler’s or Toyota’s, we’re lost going out the door,” said Dave Hubbard, advertising director for Infiniti. “Our biggest task is to differentiate Infiniti from the rest of the market.”

While Toyota is relying on its current agency, Saatchi & Saatchi, to create Lexus ads, Nissan has looked elsewhere for its Infiniti advertising. It hired a Boston ad firm--Hill, Holliday, Connors, Cosmopulos--which promptly established a large West Coast office.

The agency is best known for ads laden with realism--such as those it created for Wang computers and John Hancock insurance. “We’re counting heavily on their creativity,” said Kazutoshi Hagiwara, president of Nissan Motor Corp. U.S.A., which will also be Infiniti’s marketing arm. “The European luxury cars already have established images. The problem is, how do we communicate that we also have an excellent product? Well, I know it won’t be an easy job.”

That may be an understatement.

“Keep in mind, these are $40,000 cars,” pointed out Maryann N. Keller, analyst at the New York investment firm Furman Selz Mager Dietz & Birney. “Any company that thinks it can launch an ad campaign and magically sell gobs of these cars, well, that company is not thinking straight.”

A big part of the problem is confusion. Nobody knows who is making what car any more. “The only people who can remember the names are people who get paid to do it,” said Leonard Pearlstein, president of the Los Angeles ad firm Keye/Donna/Pearlstein, which creates ads for Suzuki.

“The real challenge is this,” said Lee Clow, president of the ad firm Chiat/Day, which creates ads for Nissan, “How do you find a new way to say something that, in truth, isn’t really revolutionary?”

Some skeptics wonder if the task isn’t too great.

“I don’t know how you give something an aura that Mercedes has gained over years and years of building cars and winning races,” said Jack R. Nerad, executive editor of Motor Trend magazine. “You can’t create a mystique overnight. The best you can do is try to create a good product.”

Stay Tuned for More Lying and Jamming

Joe Isuzu will continue to lie and the California Raisins will continue to dance in 1989.

I heard it through the grapevine--no lie.

These characters--among the most popular figures in today’s advertising--were created by California ad firms. Although the people who created these advertising campaigns won’t specifically reveal the story lines behind next year’s advertisements, they do say that viewers can expect new twists to both campaigns.

“Originally Joe just told lies,” said Peter Stranger, president of Della Femina, McNamee WCRS, which creates the ads, “but later he took to broad exaggerations. We’ll continue to have him broadly exaggerate--and to have him tweak the competition.”

David Leisure, who plays the Joe Isuzu character, has since become a TV actor and now co-stars in the hit television show “Empty Nest.” But he has also signed to star in a dozen new Isuzu commercials in 1989, Stranger said. And his salary, “which was originally union scale when he filmed his first commercial, is now several hundred thousand dollars annually,” Stranger said.

Meanwhile, the popular dancing raisins have at least three TV new spots planned for next year--including two 15-second commercials, said Robert Phinney, director of advertising and promotions at the California Raisin Advisory Board in Fresno.

“We’ll put them in even more unusual situations,” said Phinney, “but we don’t plan to use any more celebrities.” A current ad--using the clay animation format--features a clay Ray Charles look-alike. The clay figure, dubbed “Raisin Ray,” even sings a Ray Charles song.

Earlier this year, the raisin board scrapped plans to film a 3-D raisin commercial, Phinney said. “It was technically possible to do it,” he said, “but it just became so complicated that we decided to concentrate on other things.”

As for California’s other popular commercial duo, Bartles & Jaymes, well, it still remains a brand without an agency. Nearly a year after Gallo--which makes the wine cooler--fired the San Francisco ad firm Hal Riney & Partners, it has yet to name a new ad firm. No telling who Bartles and Jaymes will be thanking for their support.

Arizona Thrift Has a Revolving Vault Door

When one of Arizona’s largest thrifts fired the Los Angeles ad agency Keye/Donna/Pearlstein eight years ago, the door to its sizable advertising vault was never quite shut.

Top executives from the thrift and its former ad agency still exchanged notes from time to time. Greeting cards were sent. And once in a while, when the ad agency created a particularly good advertisement, it would send it along.

That occasional correspondence paid off in a big way on Friday when, once again, Keye/Donna/Pearlstein was handed Phoenix-based MeraBank’s estimated $5-million advertising business.

“It’s living proof that it’s good to keep on good terms with clients who fire you,” said William J. Bragg, executive vice president at the ad agency. The agency currently handles advertising for Coast Savings, but there is no conflict because the two financial institutions operate in different states.

Oddly, the agency that MeraBank just fired, Phoenix-based Taylor Advertising Inc., formerly handled MeraBank’s account before losing it years ago to Keye/Donna/Pearlstein. “Maybe we can at least get another eight-year run,” joked Bragg, “before they get it back.”

Prepare for Onslaught From Banks, Groceries

Japanese auto imports aside, where will the Los Angeles area’s fiercest advertising battles be waged in 1989?

On several fronts, executives say--especially among banking and supermarket clients.

Some banks are already gearing up for 1991, when the state of California will open its doors to big East Coast banks that have not previously been allowed to do business in the here. Major competitors such as Citicorp and Chase Manhattan are expected to enter the state in a big way.

“This is an issue that will be of major concern to banks in California,” said James D. Helin, managing director of the ad firm D’Arcy Masius Benton & Bowles, which last month won the $20-million Security Pacific advertising business.

At the same time, as supermarket chains continue to consolidate--such as the recent purchase of Safeway stores in Southern California by Vons--the battle for their ad business will intensify, executives say. One ad executive predicted that even “double couponing” will come to an abrupt end in 1989. “There’s so few supermarket chains left,” said the executive, “that all they’re doing is hurting themselves.”