JLo's ads for Fiat took plenty of criticism - but increased brand awareness substantially.
There’s an old adage that there’s no such thing as bad publicity. Just spell the name right. That might be a matter of debate if you’re running for president, but it appears to be a valid contention for Fiat, which has been struggling to build momentum for its return to the U.S. market after a two decade absence.
Despite the controversy over the maker’s first national TV ads, featuring Jennifer Lopez, Fiat officials insist the campaign paid off, helping build awareness among potential buyers just as the Italian brand is preparing to roll out an assortment of new products.
The line-up has been limited to variations of the initial Fiat 500 minicar – the performance-oriented Abarth edition set to hit showrooms in March – with a battery version to follow – but a new 5-door hatchback is in the works, along with yet another product that will markedly expand the Fiat brand’s range of offerings.
Company officials readily admit they made a number of mistakes – decisions leading to the recent ouster of Fiat’s U.S. boss Laura Soaves. First-year sales came in at barely half the 50,000 target and, during the recent Detroit Auto Show, Fiat/Chrysler CEO Sergio Marchionne cautioned that the numbers likely won’t gain much in 2012.
“Clearly, a year ago, it was difficult to get a clear sense of where the brand would go,” Olivier Francois, Fiat’s global chief executive, told TheDetroitBureau.com. “We just didn’t know.”
Perhaps the biggest challenge, the French-born executive stressed, was simply trying to find a way to build awareness of the brand. In the initial phase of the Fiat launch it authorized only minimal spending on marketing and promotions, much of that connected with auto show appearances – such as a special showroom briefly set up in New York’s hip SoHo district to coincide with the Big Apple’s annual car show.
“I was begging with them to give even a little money to spend on local advertising, but they wouldn’t do it,” lamented a major Midwest dealer who has himself invested over $1 million to take on Fiat. He asked not to be identified to avoid souring relations with the automaker.
Advertising finally began in earnest last autumn, when Fiat unveiled a series of spots featuring the music celebrity best known to fans as J.Lo. But the campaign received some intense criticism, especially when it was revealed the singer filmed scenes in Hollywood that were supposed to show her driving in New York’s South Bronx, her original home and a neighborhood she declared “inspires me.”
It may have taken its hits, but the campaign paid off, insists Tim Kuniskis the executive who replaced Soaves late last year. Prior to turning on the ad campaign, the brand had a miserable 9% awareness among potential buyers. It quickly more than tripled.
“Everybody was a Monday morning quarterback on the J.Lo campaign,” said Kuniskis, who previously oversaw marketing for both the Fiat and Chrysler brands, “But, it’s absolutely phenomenal to go from 10 to 30% in just 60 days.”
Moving forward, the Italian brand will shift away from celebrity advertising, putting a sharp focus on product attributes with the launch of the Abarth, which bumps the horsepower of the anemic base 500 from 101 to 160.
(Fiat will offer a free track day to Abarth buyers. Click Here for that story.)
“Celebrities are great if they fit the right message,” added Francois, noting “You may see us use other celebrities in the future, but for now there is no plan.”
The addition of the Abarth is part of what Fiat officials hint could be a substantial expansion in product in the years ahead. “Our line-up will be very close to what Mini has done,” said Francois, noting that the British marque debuted with only one product. According to recent reports, Mini will soon have as many as 10 in its U.S. showrooms.
A 5-door hatchback would be a significant update for a brand that has so far just rolled out different flavors of the 500. Yet another product is under development – though neither Francois nor Kuniskis would confirm previse details, only noting that whatever Fiat offers “will always be in the B-segment.”
Looking ahead, more product should translate into more sales, added the global Fiat boss. As the additional models debut “We can get closer” to the original 50,000 target, he predicted.
To support his optimism, Kuniskis pointed to the surge of activity on the Fiat website, which logged about 3.5 million visits during the final quarter of 2011. The well-established Chrysler brand, which saw a double-digit sales jump last year, only recorded 4.5 million visits.
But because many potential buyers are still just getting familiar with Fiat, Kuniskis cautioned “It could be…a year before they come into the showroom.”
In the meantime, a challenge for the company will be to keep dealers happy. As it signed up retailers it demanded they establish costly standalone showrooms, something that will be difficult to support financially at current sales volumes. Not surprisingly, it took longer than expected to lock down the current total of 137 dealerships, but despite some complaints from retailers, Fiat officials insist they’ll hang on as new product and more aggressive marketing belatedly begins to pay off for the brand.