Lousy Marketing -- Not Lousy Cars -- Killed Detroit

Long before the CEOs of the Big Three hopped aboard their private jets, they presided over the biggest marketing failure in American history.

Many miles ago, long before Detroit started losing billions a month, it lost something even more important: its roadmap to the American unconscious.

So while we've heard all the arguments for the impending demise, it's high time we took Detroit's slow-motion suicide for what it is: a marketing failure, probably the biggest one in history. It takes years of monumental incompetence to squander the biggest, deepest love affair the American consumer has ever had.

I wasn't surprised when Detroit's million-dollar men cranked up their corporate jets on Friday, popping warm nuts while strategizing about how to land some cold cash.

That 360-horsepower blunder--which may very well have sealed the fate of the Big Three--capped off decades of marketing incompetence.

Car companies have so many levels of creative approval that even a crash dummy would have trouble surviving the process.

The image destruction started when their brands began to exhibit the worst kind of corporatist behavior, summoning up dark memories of the tobacco industry. They battled against every safety initiative, starting with mandatory seat belts. They tried to beat back higher CAFE standards. They lobbied against electric cars and alternative fuel.

As consumers were increasingly making purchase decisions based on the practices of the company behind the product, the domestic auto industry became a loathsome choice.

Detroit's bad actions hurt it with a huge part of the market--the more than 30 million people in Richard Florida's "Creative Class" who work with ideas, live in urban areas, and are more progressive. Even the more traditional consumers who stuck with American cars felt abandoned.

The jerks running the companies didn't help. Your CEO is a marketing statement, and in an era of visionary leaders celebrated by the media--other than Lee Iacocca, who retired in 1979--the guys running the show were overcompensated, colorless zeroes.

From 1974 through 2000, GM was piloted by Tom Murphy, Roger Smith, Bob Stempel, and John Smith, failures whose names are recalled only as poster guys for deck-chair rearrangement.

As these weak-kneed leaders came under pressure for their practices and products, they turned psychologically inward. It all culminated with Michael Moore's Roger and Me in 1989, a national display of corporate paranoia. An industry whose birthright was independence came to represent villainous bureaucracy.

And in a colossal marketing mistake that scraped away any chance for individuality, Detroit's legions of PR firms continued to let its brands be bundled as the Big Three. Can you imagine Apple permitting itself to be bundled with Dell and HP this way?

Ironically, though, as its reputation plummeted, Detroit's cars actually improved. The Detroit Free Press notes that Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." And J.D. Power ranked Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac, and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, and Volvo.

This is an epic advertising failure, attributable to Detroit's stubbornness and arrogance. The Big Three kept working with a small group of the biggest and most boring ad agencies, refusing, until recently, to work with anyone who didn't have car experience. Leo Burnett has worked with GM since the 1930s; J. Walter Thompson has worked with Ford for more than 60 years.

I've worked in advertising for a while--thankfully, never on a car account. And I will tell you that it's well-known in the industry that working with Detroit is torture. The Big Three's demand for mediocrity is legendary. They have formulaic rules--the "running shot" of the car has to be a certain length in every commercial--and they have so many levels of creative approval that even a crash dummy would have trouble surviving the process intact.

That's why, even though GM, Ford, and Chrysler spend more than $6 billion a year in advertising, it's tough to conjure up a single memorable spot. Their uninspiring advertising speaks to an America that barely exists anymore. We're more diverse, more urban, more media savvy. We appreciate irony and obliqueness, we demand that our sensibilities be respected and indulged. Detroit insults us.

Take this 2008 commercial for the Dodge Grand Caravan. (The way Detroit names its cars--with all the originality of meeting rooms at a Westin--is another story.) Here, some reluctant participants at a family reunion are transformed in a beatific bunch by a ride in the Caravan. (Not exactly the imagination worthy of a bailout.)

Detroit should have sought the best talent in the world. It needed to open up to smaller, independent agencies that are the idea factories for the industry. And it should have commissioned film directors, not car hacks, to direct its spots. It happens in Europe all the time. Turn Judd Apatow, Spike Lee, Spike Jonze, and Michael Gondry loose and see what happens.

I've also believed that smart marketing could have turned Detroit's union hurt into an emotional benefit. It's absolutely amazing to me that for decades, Detroit took the heat for paying decent wages and providing health care and pensions. Hey, isn't that what big companies are supposed to do? Hasn't Wal-Mart been pilloried for precisely the opposite?

Imagine if Detroit had created compelling advertising that showed its workers living the American dream, and had gotten the UAW to pitch in? The sweet stroke of marketing would have made everyone who drives a domestic car feel virtuous, ennobled. Think how much credit Starbucks gets for paying its coffee growers a few measly cents extra.

Finally, Detroit's marketing failure extends all the way to your neighborhood: the dealership network. The retail industry knows that to survive, it needs to amp up the experience and add entertainment. But car dealerships look like post-apocalyptic empty shells that survived a neutron bomb.

Why didn't Detroit push its fat and rich dealers to leverage the power of architecture and hire Frank Gehry to create a new paradigm? Think about the branding statement that would be.

The services leave something to be desired, too, falling alarmingly short of what you get in comparable imported dealerships. Quick example: I checked the hours of my local Buick and VW dealers. Buick's service department is closed on Saturday; how thoughtful of them. VW is open on Saturday, and also opens earlier and closes later during the week.

Seems like a basic marketing equation to me: If you're not going to be there for your customer, your customers won't be there for you.

Adam Hanft is a decoder of the consumer culture and our branded planet. He blogs for The Huffington Post and FastCompany.com, and has been published extensively, including in The Wall Street Journal, Slate, Civilization, Radar, and the back-page column for Inc. He has appeared on CNN, the Today show, and many other media outlets. He is also the co-author of Dictionary of the Future. Adam also decodes the culture as founder and CEO of the marketing and branding firm Hanft Raboy.

This piece appeared in the Daily Beast on November 24th, 2008.

Comments

[BottomLine2008]

Well, the cars sucked, too. Less efficient than foreign cars, ugly design.

[SparXter]

Yes... equally lousy cars from lousy marketeers... Marketing can work near miracles once in a blue moon, but nothing could paper over the crap they've been building for decades.

[Rudderman]

You are correct. While lousy marketing has sunk and will usually kill the best inventions, no amount of dough or brilliant creative work can save a flawed product. Detroit has shown little leadership in either area for years.

[DavidJames]

Adam,

What you are saying is true. It is the ultimate irony. The highest quality cars ever, but unfortunately the wrong cars. HIgh quality vehicles that are big, heavy and inefficient is the product that Detroit is producing. Better advertising won't help.

No amount of advertising can cover up the stupidity of crushing the EV1.

Regards,

[emcd]

I hear a lot about the EV1 and what a tragedy it's suppression was. But if it was so revolutionary and terrific, why aren't they just resurrecting now? Why all the problems Chev is having bring the Volt out by 2010?

[DavidJames]

If GM had any marketing sense they would resurrect the EV1, the EV-T!

[ObamaSheeple]

You should watch "Who killed the electric car?". It is available on youtube. GM only made 4 EV1's a day in one tiny factory in Lansing.

[Russycle]

GM couldn't resurrect the EV1 if they wanted to because, after they scrapped it, GM sold several critical patents to Chevron, who, strangely enough, did not start producing electric cars. Chevron did, however, stop licensing the technology to Toyota, forcing them to stop producing the electric Rav-4, which was starting to take off.

[Viper]

And yet GM and Ford have the most Hybrid models and the highest average fleet MPG?

Regards

[ObamaSheeple]

2007 Total Fleet CAFE standards for car companies.

Toyota averaged 29.69 mpg with its lineup of Priuses, Camrys, Corollas and Tundras. The no. 1 brand edged out Honda and Hyundai, which got 29.47 and 29.39 respectively. The Detroit based automakers? Well, not so good. GM, Ford and the then DaimlerChrysler brought up the rear with 25.16, 25.15 and 23.97

http://www.autoblog.com/2008/07/25/toyota-tops-big-company-cafe-ratings-for-2007-model-year-with-29/

You can check the NHSTA website, link at the end of the article, for more specific data such as volume which is nearly identical between GM and Toyota for 2007.

[fillou]

J.D. Power ratings are to the car industry what Stand & Poor, Fitch and Moody's ratings have been to CDOs on Wall Street = a FRAUD !

[tomas0808]

but...but...but..."This is ourrrrrrr country...." isn't it? (John Cougar GFY)

[Articulator]

My experience also says that people bashing American built cars are using a rap from 15-20 years ago. The situation and the cars have changed. American car quality is now very good..

[fillou]

please elaborate, which car ? which brand ?

[emcd]

I recently had to give up my Ford Escape at slightly over 200K -- that was a great vehicle with VERY few repairs required.

I purchased a smaller Focus as a replacement and am getting about 37highway mpg.

What I would love to buy is an American made plugin that gets 100miles to a charge. But unfortunately I think I am still in a very small minority. People SAY they want these types of cars but won't put their money where their mouth is (yeah, yeah, prius owners, but you are the only exception that I see...)

[TakeSake]

I agree. Unfortunately, it will take another 15-20 years to prove them out over time. That's a tough situation to be in.

[gfs5541]

Nah! Lousy Marketing AND Lousy Cars KILLED Detroit!

[jayrayspicer]

Hanft raises an interesting angle that I hadn't really considered before, but I think it's safe to say that an utter failure of imagination at every level is what sank Detroit. It's true that quality has improved substantially since the dark days of the 70s/80s, but that's not exactly a bold move. They're just finally keeping up with the Joneses in that department. With some minor exceptions, like Chrysler's Prowler, Detroit has been a celebration of dullness since the late 60s.

[envirossf]

I disagree with the premise of the article. The big Three is not having problems because of marketing, but of what they choose to market, and build. Two recent examples standout, the Chevy Traverse and the Ford Edge. By bombarding the airwaves with ads for the Traverse, Chevy reinforces the idea that the US doesn't get it. The key points are that everyone needs an 8 passenger vehicle that gets 20 mpg. This idea has led even the Japanese carmakers to advertise and build bigger vehicles with extra rows of seating. Sure, there are some that need this capacity, but every day, on every road in America, you see 99% of these vehicles with 1 person in them commuting to work. This is monumental irresponsibility by the decision makers who choose what to advertise.
The Ford Edge was a great opportunity for Ford to be on the cutting edge of new technology when it came to powering the vehicle. The Edge is a good looking, technologically advanced crossover, built to compete with Japanese and European rivals. But instead of offering a model that had a hybrid, or flex fuel model in the new design, they kept the smaller, more outdated Escape as their hybrid standard bearer. A perfect opportunity blown. And they wonder why we think they don't get it.

[YeahDonkey]

How about we split the difference, they had crappy cars and advertising.

[kozy]

The problem is the way cars are sold. Dealers should be in business to SERVICE and DISPLAY cars but should not have the EXCLUSIVE right to sell them. New car buying should also be available on the internet as a dual method of purchase. Put in an order for a car over the internet, identify a dealer you want to go to for future service, pay by credit card or other method. The car is delivered to your door when available along with temporary tags and all papers. The dealer that you have identified for service receives some compensation from Detroit for the sale and for displaying cars. Why would this increase sales? Because many people don't like all of the time and complexity required to buy a car from a dealer. For people that can't afford a car, and have a lot of time on their hands, the typical dealer is the place to buy the car. But, if you are busy, don't like to waste time, and have cash or available credit, the internet would be the place to go.

[notb observer]

Unfortunately, part of the "ritual" has been about getting people to upgrade ("supersize") their purchases, either by adding a lot of "stuff' to the base model, or buying a higher end model. That's how the dealers make money. When the mid to high end imports started to arrive "en masse", they all came from the factory "loaded", and some with 3 to 5 years of courtesy maintenance and better warranties. Also, keep in mind that for the last decade or more, the Big 3 have been in the credit business as much as in the car business. They are selling loans (financing) and cars from the same outlets.

Another thing you overlook is that net to a house, a car is a the second largest investment people make, so they will want to kick the tires and sniff the upholster. They will also want to sit in it and take it for a test drive. You can't do that on the internet !

[emcd]

You CAN blame a lot of things on lousy commercials, that's true.

But car companies pushing their most profitable items -- isn't that what a corporation is supposed to do?

Until recently, the stupid American public scoffed and sneered at high gas mileage as if it was something that sweater-wearing, Jimmy Carter-esque losers did. That was not for us macho American masters of our domain!

I have noticed that the media continues to blast American car makers even when they DO something good. For instance where is the massive hoopla connected with Ford just scoring FOURTEEN models at the top of the insurance industry safety rankings?

[Dystopic]

a far as Fordand the 14 models.... I would hope so, they own Volvo.

[notb observer]

I don't think there's a single reason for "what killed Detroit". I liked Mr. Hanft's critique of the commercials we have been fed over the years. They are cookie cutter ads, just like James Bond movies or Lionel Ritchie song. With all the money they pump into advertising, there has never been a single Big 3 car ad that I can say was excellent, so they lost me on that count.
I also think that quality has been a major issue. Although it may have improved somewhat over the years, there is a perception among many buyers that domestic cars are garbage. Additionally, the paralyzing bureaucracy of these massive corporations has pretty much eliminated any possibility of fresh thinking and exciting or beautiful products. Decades ago, people bought American because certain brands spoke of a person's status or style, but the arrival of high end imports redefined quality and style.
Lastly, as it became apparent that the market size and their share in the market was declining after the baby boom, even when real incomes allowed multiple family cars, Detroit invented the concept of "planned obsolescence". In order to remain viable it became necessary to sell more cars tot he same people, and they achieved that by making increasingly disposable products, at a time when import quality was very high.
For many consumers, all it took was one experience with the style, quality and reliability of imports to be sold for life.

[Balancement]

If American cars have improved in quality, as someone said earlier -- too little/too late. After someone gets burned a couple of times with cr@ppy American cars that spend more time in the $hop than on the road, you learn not to go into that showroom again. I won't even *park* my foreign car next to an American car because I'm afraid it might get damaged by the American car blowing up, catching on fire, or a door falling off and denting mine.

GM+Ford+Chrysler = Dinosaurs. And it's about time they became extinct. They had their chance, they refused to evolve, they failed. Buh-bye.

[leftword]

I disagree that lousy cars are responsible for the domestic automakers' problems. My last 2 cars, a Ford Taurus and Dodge Intrepid, have been terrific. Both models sold very well , so naturally they were discontinued.

Detroit's wounds are, as the author says, self-inflicted. Their bitter, decades-long battle against safety features, better gas mileage and consumer preferences is legendary.

I think they suffer from the same disease that apparently inflicts many large American businesses: greed. They push big gas guzzlers because of the high profit margin. They can build good small cars, hybrids and electrics - if they want to. But they just don't want to.

[hwj]

As I've said before, there are many families in the United States whose members are too large to comfortably fit in small, fuel efficient vehicles. Thus, they must purchase SUV's and minivans. I can't imagine a Prius toting around a half ton of humanity.

[notb observer]

The statistics show that the population of the country is increasing because of immigration. In other words, people are having children at a lower rate than people are dying off. The typical family has one and a half kids, so the idea that everybody needs a minivan or an Escalade is nonsense. While there are some large families (the Palins...), the vast majority would be accommodated by a smaller car, so there is really nothing to justify the fact that there are so many huge gas guzzlers on the road. We also need to be responsible about our choices and figure out if it really makes sense to drive everywhere when we can walk, take mass transit, or cycle.

[chaz]

Exactly! There it is the magic word. GREED! Isn't it funny that the "liberally bias media" never talks about how much money the greedy ceo's skim off the top (in all industries) and at the same time the media constantly blames unions and or the common worker. It never ends now the media is blaming Fanny May and Freddy Mack for the fall of wall street. What a joke. I guess Fanny and Freddy should of done a better job of marketing.

[MajorKong]

Actually their marketing was brilliant during the 1990s. They managed to convince the American public to buy trucks as "safer cars". Suddenly every suburban soccer-mom "needed" a 14mpg GMC Tahoe to drive their 1.5 children around. Meanwhile the automakers made huge profit margins on these vehicles.

[negogato]

In 2005, 67 of our US senators voted down an increase in automotive fuel efficiency.
Early in 2007, the auto industry claimed that 35 MPG was 'unachievable.'
Nevertheless in 2007, the newly elected 2006 congress passed legislation requiring the first increase in fuel efficiency standards for cars and light trucks in more than 30 years.

Efficiency was a bad word in the halls of congress for 30 years. Why?
Why was it unachievable in America?

And it is not just cars and trucks builders who took no advantage of available technology for fuel efficiency. Increased efficiency standards for durable goods such as refrigerators and air conditioners that were to be gradually phased in and would have saved consumers money every day were canceled [Bush executive order 2000]. Our nation has seen a steady climb in electricity consumption in the past decades which means an increase of coal and gas consumption.

Inefficiency means no choice for our dollars. Consumer spending for coal fired electricity and gasoline does not circulate to other markets in America where it can generate jobs, and much of it leaves the country.

The marketing plan of the coal gas and oil companies is consumer demand guaranteed by inefficient products. And it is the crux of a national problem.