Auto Industry Innovating in Digital - Especially In-Game

It's pretty amazing to me how car makers are adapting to the upheaval in the auto industry. They're consolidating, re-thinking the number of brands they carry and restructuring like never before. And while there's been a lot of pain, there will ultimately be a lot of gain-greener cars, leaner manufacturing and hopefully, a resurgent U.S. auto industry that is once again the envy of the world. Certainly, Ford's earnings of $1 billion for the most recent quarter are a clear sign of a recovery.

While all of these changes and their ultimate impact will take time, I'm noticing a lot of forward thinking that's taking place in the world of automotive advertising right now.

A case in point: Hyundai recently announced a campaign to raise awareness with a key target audience - young males - by integrating their Genesis Coupe into the much anticipated racing game, Forza Motorsport 3, which launched only on Xbox 360. On Nov. 17, Forza gamers on Xbox LIVE can download a vehicle package and take part in a contest which will further cement the brand in the minds of their target audience.

Today's announcement from Hyundai got me thinking about how many automotive brands have embraced games advertising, and are actually leading the way with some groundbreaking campaigns. In the Advertising Business Group at Microsoft, we pay close attention to trends in automotive advertising, because they are often a harbinger of a more widespread trend among big brand advertisers. In fact, national automakers and local auto dealerships together spend almost $20 billion a year on ads, more than any other category of advertiser, so their influence can't be ignored. Historically, more than half of that amount has been spent on television advertising.

But we're seeing a lot of digital and TV ad budgets moving to the games advertising space. On Xbox LIVE, a number of leading auto brands have launched splashy-and highly effective-ad campaigns in the last few months, including Fiat, Nissan, Honda and Kia, among others. Some of these automakers are taking advantage of the multiple properties Microsoft offers to create promotions with multiple touch points. Like Kia, which launched a comprehensive games marketing program spanning Xbox.com, Xbox LIVE and several popular Xbox 360 titles. The effort included a national sweepstakes where the winner received an all-new Kia Soul and entered for a chance to win the grand prize on Xbox LIVE Marketplace.

For the first-time, the audience could also win by texting a code on their mobile phone to their Gamertag. This text to win component was an innovative and effective tactic that other brands may want to consider.

The Kia campaign results blew me away. Sweepstakes entries totaled over 78,000 through in-game ad texting and Xbox LIVE downloadable gamer pics. Kia branded content was downloaded 139,000 times and shared amongst the 300 million friendship connections on Xbox LIVE. And advertising effectiveness research following the campaign resulted in a whopping 163% lift in brand rating, with viewers who saw the ads twice as likely to visit a Kia dealership.

Interaction with the brand was also significant: viewers spent an average of 298 seconds interacting with the brand-- that's 397% more time than a standard non-interactive 60 second TV commercial. Those of you who have heard me speak know I'm always going on about what makes games advertising different: audience, engagement and impact.

I think the marketers at Kia and the team at their agency, Initiative, understand the unique nature of the deeply engaged gaming audience, and so, forgive the pun, hit on all cylinders with the campaign. And it paid off.

I'm hopeful that the breadth of automakers advertising on Xbox LIVE and related gaming channels such as MSN Games and Massive, and the dollar amounts they are spending-in some cases, rivaling TV or large print campaign budgets-points to a trend that will likely accelerate, as the gaming audience continues to grow and broaden and new technologies allow even greater tracking and ROI analysis.

Because at the end of the day, it's all about driving results.

Regards,

Mark