Nissan Motor Corp. USA is planning big changes in its quirky $200-million advertising campaign because its dealers aren’t enjoying the ride.
Beginning in April, Nissan will begin airing a second TV campaign that runs parallel with the quirkier spots and emphasizes automotive features and special deals. Missing from the new ads will be Mr. K, the mystical Japanese character who appears in Nissan’s offbeat “Enjoy the Ride” commercials as a symbol of the brand.
The new ads are a response to dealer complaints that Nissan’s 6-month-old image ads aren’t working. The pace of Nissan sales lags far behind that of other Japanese imports, and dealers say showroom traffic is not picking up.
“The advertising is cute, but that is about it,” said Cleveland dealer Jeff Greenberg. “It isn’t selling cars.”
The new ads represent a break in strategy for Nissan and illustrate the tug-of-war that goes on in automotive advertising between dealers and the factory. Nissan said its “Enjoy the Ride” campaign is intended to build the brand’s long-term image. Dealers want ads that sell--now.
“They are investing in the future,” said Denver Nissan dealer Mike Tynan. “But I’ve got bills to pay today.”
In an unusual compromise, Nissan won’t be junking its image campaign, created by its longtime ad agency TBWA Chiat/Day. It will continue to run those ads along with new ones intended to satisfy dealers--in effect, running tandem campaigns. The new spots will be traditional car ads.
“You’ll see sheet metal, values, specifications--everything that makes dealers’ little hearts flutter,” said Bob Thomas, president and chief executive of Nissan USA.
Thomas said Nissan won’t increase its already sizable ad budget to produce and air the new ads. Instead, the funds will come through efficiencies. He said, for example, that the company has reallocated dollars that used to go toward such perks as the “President’s Circle,” an annual trip for the top 150 dealers to the Caribbean or Hawaii.
Nissan launched its image ads amid great fanfare in August, hoping to compensate for a lack of new models by convincing consumers that its cars are fun to drive. The company quadrupled its media budget to air the TV spots, committing more money to place ads than any auto maker except General Motors.
The kickoff spot was a two-minute epic in which a young boy fell into an underground pit that doubled as a museum for vintage Nissans. Mr. K, sporting a Datsun cap, took the boy on a tour.
Subsequent spots showed a Nissan driver dodging pigeon droppings, dogs hijacking a Nissan Pathfinder, and dolls intended to look like Barbie and Ken driving away in a toy car. The spots close with a cameo from Mr. K and the slogan “Enjoy the Ride.”
The ads were greeted with surprise at Nissan’s headquarters in Tokyo, where executives have shied from touting the company’s Japanese roots in the United States. Moreover, Yukata Katayma, the former Nissan USA chief portrayed as Mr. K in the ads, was forced out of the company by internal politics in 1977.
But Thomas said the commercials are causing Americans to warm to Nissan. He said internal research shows that consumer awareness of the Nissan brand has risen by 30% and the brand’s likability has increased by 100%.
“We’re extremely pleased with the results,” Thomas said.
But so far, the campaign has yet to convert consumer sentiment into sales.
Nissan sales in the United States fell 2.7% in 1996 as the company’s market share dipped below 5%. Nissan sales climbed 8.4% in January, an improvement that pales next to the performance of its Japanese rivals. Toyota recorded sales gains of 52.8%, while Honda posted an increase of 21.7%.
To be sure, there are many reasons for Nissan’s laggard performance. In a market hot for sport utility vehicles, Toyota and Honda have responded with new models. Nissan’s new offering is more than a year away. Meanwhile, Nissan’s mainstays, the Sentra and Altima, face competition from other premium small cars.
Nissan is in the process of eliminating about 450 employees at its Gardena headquarters and has said further layoffs are possible. Included in the downsizing are upper-level advertising and marketing executives, but Nissan said those moves are unrelated to decisions about its advertising campaign.
At the same time, Nissan has changed the incentive program for dealers, a move that fueled discontent over the advertising. Dealers said that over the last six months, Nissan has based incentive payments on a formula that includes meeting quarterly sales goals, customer satisfaction targets and market share improvements. Under the old formula, customer satisfaction and market share were not taken into consideration and dealers could earn a portion of their incentive for each car sold.
Some dealers complained they are having difficulty meeting their quotas because the commercials are not bringing customers into showrooms--though the company said 70% of dealers are meeting quotas.
“It is a double whammy,” said one Midwestern dealer.
In addition, some dealers say they’ve had to spend more on local newspaper and radio ads to lure customers to showrooms because the national spots are ineffective. Tynan, the Denver dealer, said he is spending 25% more on ads.
“We needed something with a hard sell to it,” said Atlanta dealer George Sutherlin. As the nation’s third-largest Nissan dealer, he lobbied for new advertising. “They say they are going to show the sheet metal and that’s great. You can’t do a whole campaign with Barbie and Ken.”