Volvo: AOL Car Launch Working Fine

In October, Volvo Cars of North America announced its plan to market its new S60 sedan exclusively online. Now, as the car company takes the campaign to the next level by going offline with marketing, the decision to start with an online-only effort is coming under fire by dealers who say the campaign actually hurt sales.

“At least from my side of it, my sense was that it was a good idea at the heart, but I don’t think that we really saw as many people coming in that were really fully aware of the car,” said Paul Magdziuk, a sales consultant at Byer Alan Auto Sales in Syracuse, New York. “Usually when you’ve got a product launch, you’re blasting various forms of the media … and the Internet is just a part of that.”

In a time of increasing debate over the value of Web advertising, Volvo’s decision to tap the Internet as its chief marketing medium for a core vehicle in its lineup was a first in the automotive industry.

In addition to banner ads, the campaign included a sizable promotion in conjunction with America Online. Through the promotion, AOL members who purchase a Volvo S60 are offered $2,100 in accessories for no extra charge. Ads supporting the promotion appear throughout AOL’s Auto Channel and elsewhere on the service, as well as on various related AOL properties like MapQuest and Digital City sites.

The promotions aim to direct traffic to the vehicle’s launch site, www.revolvolution.com, which registers prospects and directs visitors to dealers.

But while Magdziuk said his dealership saw a “pretty decent” conversion rate on Web site leads, he said that “with the Internet being more-or-less the sole piece of the puzzle, I don’t think we got quite the [overall] number of customers in.”

Others, like Bay Ridge Volvo Autos of Brooklyn, New York, said that the buzz about the online campaign helped to drive what sales the dealers were seeing.

“We’re getting a lot of contacts through AOL, and it’s generated some sales, but the leads have been … a nice boost. We’re getting a lot of hits,” said sales manager Jeffrey Rozany. “I don’t know if the interest would have been there if it were launched in the traditional fashion. It’s easier to get online than it is to get in to the showroom, a lot of the time.”

“And showcasing the S60 online “makes it a little easier to look at the car, and it makes it easier that there’s an [inventive package] out there. I’m satisfied.”

While dealer opinion is mixed on the S60’s launch strategy, Volvo executives maintain that the campaign has thus far been a success.

“In a nutshell we’re really pleased with how it went. We’re real pleased with the customer interest in this. I think that we always figured that this was going to be something that would be fairly impactful,” said Volvo North America’s e-business manager Phil Bienert. “But in a number of respects, I think there were elements of online program that exceeded our expectations.”

The company said that more than one million users visited the car’s Web site, Revolvolution.com, and more than 21,000 users saw the site and registered as a prospect.

On the site, “a user configures a car, then gives up personally identifiable information. That means they’re serious, so from that point of view, we think we’re doing really well.”

But while leads are great, conversions are what matter in the final estimation. And Bienert said that, while sales aren’t at the pace Volvo had wanted, the campaign is performing well.

“We’re having a hard time with real-time figures on sales conversion. But … buying a car is not buying a book. It’s something that doesn’t take place immediately. There are some people who are holding their breath,” he said. “Though all we can measure right now is leads, there’s a lot of things that would lead us to making a logical conclusion that we’ve had a very positive return on the program.”

But Bienert decline to comment on how the launch had performed versus other vehicles, since so many aspects of the S60’s launch were different from recent launches. For one, it was the third vehicle the company launched in 2000 — a feat by a company that industry insiders (and employees themselves) joke has historically “launched one new car every ten years, need it or not.” Market conditions too in the second half of 2000, also contributed to a different environment for the S60 than Volvo’s other two 2000 launches.

“You can’t really do an apples to apples comparison on one car to another, you have to factor in all these other conditions, market, economy, who your target customer is,” Bienert said. “The other two vehicles were not launched with same market conditions — with stock market where it is in third and fourth quarters, and with consumer uncertainty. There are a lot of differences, so it’s hard to say.”

“In terms of customer interest, it took off a lot faster than our other models,” Bienert said.

Some dealers agreed.

“I think we captured a lot of people just on the style. People that might not have looked at us as seriously before,” Magdziuk said. “Certainly in that sense, [the campaign] was a real plus for us. From my side, it might have been helpful if [online work] was just part of the overall strategy.”

Bienert said dealers’ mixed reviews were an anticipated — and necessary — cost for revamping a traditional, franchise-based sales industry like Volvo’s.

“Some dealers who were already very active on the Internet thought it was great. And there were some dealers who, based on their specific market, would have favored television,” he said.

“These are steps in a long path of changing the way we do business. And you’re dealing with an independent franchise organization who have to respond to local market conditions — maybe some are in an area with higher average ages or lower income levels — that’s why you generally get a mixed reaction,” Bienert added. “But it definitely opened a lot of dealers’ eyes to online marketing.”

While other dealers might have reservations, Bienert said Volvo is in talks with AOL about extending the program beyond its March 31, 2001 conclusion, and about launching similar promotions for other upcoming products. Volvo’s already doing some early Internet prospecting for its upcoming sports utility vehicle, which it announced at the Detroit Car Show.

Volvo also said it would go ahead with previously announced plans to launch a print campaign in late January to follow-up on the vehicle’s launch period. The company earlier said the print work is not an indication of its lack of faith in Web marketing — since most vehicles’ fortunes are generally made or broken within their four-month-long startup period — but an effort to show Volvo’s continued support of its new vehicle.

Volvo’s agency of record, New York-based Messner Vetere Berger McNamee Schmetterer/Euro RSCG, and MVBMS’ integrated marketing arm FUEL North America, oversaw the campaign, with digital work done by Long Beach, Calif.-based Heavy Water.