Social Samosa converses with Santosh Iyer, Vice President, Sales, and Marketing, Mercedes-Benz, to understand more about its increasing investments on the digital front, growth plans going forward and e-commerce becoming a key channel for sales in the luxury automobile sector.
Germany luxury carmaker, Mercedes-Benz aims for double-digit growth this year with high demand coming from consumers. However, the supply chain still remains a challenge.
Sharing its strategy to navigate through the challenges, Santosh Iyer, Vice President, Sales, and Marketing, Mercedes-Benz, tells Social Samosa, how the company won’t be investing in brick and mortar for new car sales going forward, while keep focusing on its omnichannel approach. Having recently launched its marketing campaign "Are you AMG-ready?” for Instagram only, the brand has underlined an important strategic move to target social-media-savvy AMG customers.
Discussing its strategy, Iyer shares why short-format video content gives the brand the biggest leverage. He gives more insights on its association with influencers and the continued relevance of traditional mediums.
Mercedes-Benz India has rolled out a new marketing campaign "Are you AMG-ready?" What is the objective behind the campaign, and what RoI the brand is looking at?
AMG stands for the performance category under the luxury car segment and we have been quite aggressive in this category since 2014. Last year, the growth rate exceeded around 100% for this brand, we have almost doubled the growth of AMG cars in India. This gives us a lot of confidence that there is a big set of performance enthusiasts, who would love to own these cars and drive these cars.
Through the latest campaign, we aim to penetrate AMG to India further and show the wide range and future platforms that AMG has. In this perspective, the targeted audience is quite a niche and that is why we have taken more of a targeted approach by releasing the Instagram-only campaign.
All our customers, target groups are there on the platform. At the same time, through this, we can drive traffic to our stores, where customers can explore more. So it's more of an integrated approach, taking a big departure from the conventional way of using a TV commercial and deploying it on Instagram.
Why only Instagram and what metrics would you be using to measure the RoI on this medium?
Our current base of customers is very actively posting on Instagram than on any other social channels, that's something very clearly shows the disposition to the platform.
We are targeting two sets of buyers via the campaign- one is the young guys between 30 to 40 years of the age group who are buying an AMG car for their own personal use; the second is the Gen Z who is between 19 to 23-year-old group.
Although this group is not in the shopping mode yet, we are sure in the next one or two years' time they will end up buying these cars. For both these target groups, we feel Instagram is a much better channel.
Digital offers a fantastic platform to measure campaigns. In this campaign, we are looking at the time spent, engagement, and also how much traffic comes to our own web platforms (our website and online e-commerce store).
Which is the agency behind this campaign and what exactly was the brief given to it?
This is a global commercial produced in the UK. In India, we have Omnicom as the agency consolidated for the overall creative to media services and it is the one who has selected the media, which is primarily Instagram. The video is ideated and conceptualized by the Rankin Agency in London.
How would you define your overall marketing strategy, and how have your ad spends increased for this year?
The share of the digital medium, which is key to us, has been growing year on year and from a spend of 35 to 40% (out of the overall marketing spends) last year, this year we will go up to more than 50%. However, the traditional media also plays an important role for us in awareness building and for our franchisee partners to drive leads.
It definitely is a balanced mix, but more importantly, the key game is on personalization for us. We intend to increase our customer experiences and personalization is definitely a big differentiator when it comes to the luxury segment. We are doing a lot of work more on crafting experiences, creating personalized content, and also targeting it much more precisely, than what to be I've been doing in the past.
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The traditional media, for us, is more driven by print. It is more driven by new launches, awareness, and also to some extent, to drive traffic to the other franchise partners, mostly for the offer communication. In the luxury space with limited spending that we do, each of the mediums has its own strengths and its own disadvantages. The moment we spread ourselves too thin, we don't get the kind of targeting or delivery of the results. Therefore, we pick one medium at one time. We have left mediums including OOH and Radio to our franchisee partners since they use this medium at a local level.
A lot of experts do opine that the prominence of traditional mediums, specifically that of print has decreased for the luxury automobile companies over the years. Your opinion.
I would say it has decreased but it is still very relevant. Be it any of the social media giants like Meta, search engine tech companies like Google, or even e-commerce giants, they all still do print. It's too early to call that print may not be effective.
As far as Mercedes-Benz is concerned, we are still invested in print, and we will continue with it. More and more, it's about integrating digital also to print. The way we use print has changed, but too early to say print is no longer relevant even for the luxury category.
How would you define your overall digital marketing strategy and what role does social media play for the brand?
Social media is what we do on a paid basis and on an earned basis too. We don't intend to increase our followers as such (on social media) because we want the relevant audiences first. What's more important for us is the engagement that we can do on these social platforms. The team is always tasked to look at engagement ideas, relevant content so that there is an active engagement coming up. On the other side, we also use these platforms for personalization. With the declaration of consent that we get from the customer, we are able to target, retarget and engage with them even on their social media visits.
What sort of brand tone do you maintain on each of the social media channels and how do you go about maintaining a complete hygiene check in terms of content?
In terms of the hygiene check, we have a guide rail and a full disclosure when we are associating with any influencer. We have never worked with any content provider or influencer who has gone without a disclosure.
We aim to be very clear to our audiences also with respect to what is paid and what is not, since as a brand we strive to be responsible. Also, we go through all the sanitary checks from the team and agency sides.
More than displays, we find video content to be the most effective, and short format video content gives us the biggest leverage.
For a luxury automobile company, how vital it is to be out there on social media and collaborate with influencers?
For us, we are using not influencers for the ‘influence’ of the brand image as such, but for their reach. They are acting as the reach multipliers for us. The content (of the campaign) has anyway been produced by our partners, what we want is more and more relevant people to watch the video content. There is no attempt to use influencers where they endorse the brand or try to speak about it. It's like selecting a channel when you do a TV campaign.
Marketing is more of an orchestration of the customer journey. For the orchestration of our campaigns, influencers definitely play a big role, but I won't define it (influencer marketing) as a critical part because we can still do without them.
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Do you plan to associate with any marquee properties?
We have some bigger plans in this space but not IPL specifically. We are still exploring much newer formats, areas, and avenues to invest in properties. Not surely cricket, it is a great medium, but not for a niche brand like us.
Since digital is such an important pillar of your overall marketing strategy, what are your plans for Web 3.0?
Mercedes-Benz has entered the Metaverse with its signature G-Class, creating NFTs together with five digital artists in the NFT space. However, that's on the global side. For India, we still are speculating its relevance. We won't do this just for the sake of it.
Currently, the metaverse is still at a very nascent stage, and the quality of production that's required to give a true luxury experience doesn't exist, at least as of now, when compared with markets outside.
What was the impact of the pandemic on Mercedes-Benz and have you reached your pre-pandemic levels? What numbers are you eyeing by the end of this fiscal year?
We were able to set up our e-commerce platform in this period and today 20% of online sales come from it. We also changed our business model, we are now the only automotive direct to the customer company.
In terms of the pre-pandemic level, at the demand side, we have more than 3000 orders, and we have a huge waiting list for our cars even going as high as 12 months. Demand certainly has come back to 2018 levels. However, on the supply side, we still have challenges led by semi-conductor shortages, thus, we have not been able to ramp up our production to the pre-pandemic level. Last year we did 11,000 odd cars. this year, we clearly are aiming at a very strong double-digit growth.
What are some of the marketing trends for 2022 in the luxury automobile industry and how do you see them contributing to the overall adex?
One thing is very clear that each and every brand would like to also use e-commerce a bit more going forward. The automotive space has been one of the last adopters of e-commerce compared to many other industries, so it's high time the automotive industry also now accelerates this. That's one big trend that should happen to ensure a seamless and better customer experience and also to reduce the cost of retail.
This year, we'll also see a lot of product launches by many OEMs, so that's another big factor for driving the overall AdEx.
With a higher focus on e-commerce, what is your retail (offline) strategy going forward?
We will drive the omnichannel experience further and would not be investing as much into the brick and mortar for new car sales. However, we will continue to open new and new workshops to go closer to the customers.