Angela Zepeda, Chief Marketing Officer at Hyundai Motor America, talks to WARC’s Anna Hamill about standing out as a challenger brand, tapping into pop culture, and why diverse voices are key to success in multicultural marketing.
There’s a lot of economic upheaval at the moment in the US. Have you seen any change in consumer buying behaviors of late?
It is definitely a hard time for consumers to make a considered purchase like a car. It's a big purchase. But we have seen a couple of dimensions in the car industry: one is that there is still pent-up demand because there were issues with inventory, and there were a lot of customers who were waiting for that. So there is actually a really healthy industry in the US for car buying.
We do know that customers are having a little bit of a harder time getting financing because of the interest rates. They are making harder choices about what kind of vehicles that they're buying, because they are expensive, and that is making competition very fierce. But actually, we are very optimistic as – unlike Europe – there's still a huge growth curve for electric vehicles which is just starting in the US. The biggest challenge for the consumer right now is just that it's more expensive for them to buy a car.
How does all of that impact your thinking around marketing and putting your brand out into the world, both short-term and also longer term?
Because we think of ourselves as a challenger brand, we never turned down ad spend during COVID or the times when there were inventory challenges, which was a big benefit for us. Our share of voice actually went up during 2020 and all the way up until this year.
What we're finding right now is that our share of voice is going down but we actually started to spend a little more this year. That's just telling us now that others [competing brands] are reinvesting again. It’s becoming more competitive to have our brand stand out, but for us, it was always about keeping a consistent presence in the marketplace. I think that strategy was really good for us because if we had turned it down, we would have been really lost, so we've been very consistent.
That's a tough conversation to have: wanting to maintain or increase marketing spend in a difficult time.
We have really good executive conversations and really good support. Our COO is a big supporter of marketing, and he'd rather spend money on marketing than on incentives because incentives really were the thing that hurt our brand previously. Every car manufacturer uses incentives at some point, but you have to be careful when and how you use them.
We'd rather bring people into our brand because they really want the car, not just because it's at a good price. We make short term changes based on the market but we do have a long term plan about what we need to get done.
Marketing that taps into pop culture has been a new part of your marketing. What lessons have you learned from that and where do you plan to take it next?
We actually work quite a bit with TikTok. One of the things we did was we took part of our general market spend and we put it towards multicultural marketing. We hired an African-American agency and a Hispanic agency to do culturally relevant work, and some Spanish language creative. We had never done that for Hyundai which was a missed opportunity. Other brands were doing that really well and winning those markets. That has had huge gains for us already – it's been spectacular.
Our African-American agency came to us with a TikTok trend, which was this idea of choosing between ‘this and that’. This whole campaign that we did with the Ionic [the car model] was a whole day of choices, such as shopping versus a picnic. And then at the end of the spot, you get to pick which car you want so it gets consumers involved. We thought that was great, and it's been hugely successful.
Automotive marketing generally has been focused a lot on products and features. How much has taking that fun, story-driven approach impacted your marketing effectiveness?
We have different ‘tiers’ of budget. Tier One is national brand advertising and Tier Two is more regional, and a co-op with the dealers contributing. For many years, the brand work we were doing at the national level looked very similar to the work that the dealers were doing. What was ‘brand’ and what was ‘dealer’? It was inefficient in terms of how we bought it and the messages in market.
We had to be clear that Tier One ‘national’ spend is all about building the brand. Tier Two is much more about the features, the benefits, and driving people to the regional dealers. You want people at that point to buy. So for us, even when we use social media at the national level, it's really about building the brand. We might highlight a feature, but it's done in a way where it's about the story and drawing you in, getting you to like Hyundai and to lean in a little bit more.
As a challenger brand, you have to think outside the box in terms of where your brand shows up.
Yes, and talk to customers that never would have thought of you in the first place. . For example, we're the first automotive brand to partner with Amazon. We have all of our dealer inventory now on the Amazon platform. You can search for Hyundai and it'll connect to dealer websites if you actually want to buy. It's been almost two years now.
Dealers are still involved, but it's a great shopping experience. It's very Amazon-like. We get a lot of traffic to that site and about 77% of those people had not been to our HyundaiUSA.com site to look for a car, so it's a totally new customer who we would never have captured. Even though that's a digital retail platform, for us it's a brand play, because it's a totally different customer that never had considered us in the first place.
When you're building out your marketing teams and capabilities, which skillsets are top of mind for you right now?
We have a lot of people who want to join the marketing department who have worked at another OEM, and that’s great, but for me it’s not enough. I really like people who have been in a creative venue, like an agency, because I like people who understand the creative or the storytelling side. I like people who have the analytics and who understand that there's a business because marketing is about coming up with creative solutions to solve a business problem. I like people to be on both sides.
The more people you have on your team who can help work with your ad agency, the faster the work goes. If you don't have people who know how to see a creative concept early on, you struggle through that process and you lose a lot of time. Or you could lose a great idea just because someone couldn't see what it could be in its early phases. So I really like people who are creative on my team, not just at the agency, and it's been a big benefit.
It sounds as though you're diversifying your agency relationships as well to make sure you're getting those new perspectives.
Yes, we did need to bring in some experts for some audiences. That's a really big thing in the United States, we really had to have minority-owned agencies for multicultural marketing and it was the right thing to do… they are the only ones that could only do the contextually-relevant work that really tapped into these audiences. It's tricky work and it has to be authentic.
You're thinking about inclusion in a way that's really tied to your brand values, but also into your product positioning. How are you measuring the impact of that?
Sales is one way, but for us what we're first looking at – especially with these multicultural audiences – is GFK’s brand metrics. The big one our CEO wants us to move is brand opinion because brand opinion unlocks the key to everything. Once someone has a better opinion about you as a brand then they're willing to pay more for you in price or they're willing to recommend you… it unlocks everything. That’s hard to move, but we just recently moved it up three points. For both African American and Hispanic audiences, it's moved about two points in the last year, so already quick gains.
Now, you could say it was because we previously didn’t do anything and now we have, so that's what we've had: instant impact. But we did the right work for these audiences that leaned in very heavily to a brand they connect with, so we're going to continue to invest in those two audiences. They're huge in the United States. In fact, I wouldn't even say those are sub-segments, they're actually the general market, if you really think about it. I think the way you speak to those audiences is really key, and that's why we had to find agencies that helped us do that in just the right way.
Is there anything that you're prioritizing from a tech or media point of view right now?
We do so much, and we do a lot of ‘test and learn’. We've been doing programmatic for a long time. We do a lot of connected TV too, we like it and it allows us to have a more engaging experience, and we've found that to be very successful. We have partners like Amazon where we’ve gone very deep with all of their different offerings with Twitch, Fire TV, etc. That allows us to do an experience which is very curated.
We take a strong look at everything, but the hardest thing is what to say no to. Last year at Cannes it was all about NFTs and the metaverse. We had some good ideas brought to us, but it just felt like, for me, why am I showing up here as a brand with an NFT? Or even for the metaverse? For the money I’m spending here, what am I going to get?
So we said no to all of that and I think that was the right move for us. Other brands did it and that was great for them, but we didn't have an idea that felt right for us. When we wanted to learn about TikTok, our creatives took a lot of time to do that, and now we're known as probably the best automotive brand on TikTok.
What do you see as the biggest opportunity and the biggest challenge facing marketers?
The biggest opportunity is that there's a lot of places to engage consumers. Creatively, the sky's the limit to be honest. If you have a creative idea, you could probably figure out a way to execute it. So I think opportunity is there and technology is allowing you to do things that you've never been able to do before.
I think the challenge is to stay focused on what you need to get done and to say no to those things that you don't need to do. We have this strategy of ‘fewer, bigger, best’ especially with our partnerships. It’s about Sunday Night Football, we've gone deep with Disney, we've gone deep with Amazon and we have a big partnership with iHeart Radio in the US because we do activations across the US. We have a partnership with the Wall Street Journal, we call it the ‘trusted voices’ campaign, because they're a trusted voice.
We've really consolidated to just go deeper with engaged fans… it's really about being disciplined about saying no to things that I think just make your brand very fractured. We're trying to consolidate to make it feel very focused, so that when you see Hyundai it's repeatable and consistent in how it shows up so people start getting it.