Bloomberg News

Ford Leaves Logo Out of New Ads to Overcome Negatives

May 15, 2012

Ford Motor Co. (F:US), seeking to overcome negative perceptions, debuted a new corporate advertising campaign last month that showed new models stripped of the Ford blue oval badge and that never mentioned the automaker by name.

The TV spots, with the new slogan “Go Further,” ran for a week starting April 30 on network and cable television without ever identifying Ford as producing the cars and sport-utility vehicles shown, said Matt VanDyke, the company’s U.S. director of marketing communications. The idea was to grab attention with the new models while not putting off consumers with the Ford name.

“We didn’t need people to glance up, see the blue oval and say ‘Oh yeah, that’s Ford, they may be doing things differently, but I don’t really need to pay attention,’” VanDyke told reporters yesterday at Team Detroit, the automaker’s advertising agency in Dearborn, Michigan. “The reality of the quality of our products is just ahead of where the perception of the brand is, still, here in the U.S.”

The decision to leave the Ford logo out of the ads was based on consumer-research clinics where potential buyers reacted more favorably to new models before they knew they were made by the Dearborn-based automaker, VanDyke said. The ads show redesigned versions of the Fusion sedan and Escape sport-utility vehicle and end by displaying the gofurther.com website.

After a week, the ads appeared with the logo. They ran on several network shows, including “Dancing with the Stars” on ABC, “Late Show with David Letterman” on CBS, “House M.D.” on Fox and “NBC Nightly News,” according to Mark Schirmer, a Ford spokesman.

‘Immediate Conclusions’

“As soon as people see a blue oval” in consumer clinics, VanDyke said yesterday, “they jump to immediate conclusions as to preconceived ideas about what the company does, what it stands for. We still have a gap and an opportunity to change that perception on the coasts.”

Ford Chief Executive Officer Alan Mulally has turned around the automaker by focusing on quality, styling, technology and fuel economy. Ford earned $29.5 billion in the last three years after $30.1 billion in losses from 2006 through 2008. After Ford’s net income fell 45 percent in the first quarter to $1.4 billion, Mulally said last month the company will make more money in the year’s second half as it rolls out the new Fusion and Escape.

Ford fell 2.5 percent to $10.32 at the close yesterday in New York. The share have declined 4.1 percent this year before today.

Surprise and Shock

There are no plans currently to leave the logos off Fusion and Escape, Ford’s top selling car and SUV, in ads when those models go on sale later this year, VanDyke said. Dispensing with the logo in the ads helped generate 3.4 million online video views over the last two weeks, he said. When consumers viewed the ads online, they discovered Ford was behind them.

“What we found was that it really did surprise people and it really did shock people,” VanDyke said. “What we’ll do is take that insight and figure out how we continue to really push in those coastal markets in the U.S., where people just don’t automatically put us on their radar.”

East and West Coast markets favor models from Toyota (7203) Motor Corp. and Honda (7267) Motor Co., said Jim Farley, Ford’s global marketing chief.

“Perception and current market reality are always lagging and we still see the leaders in the U.S. market as Honda and Toyota, with Honda far above Toyota,” Farley said. “Nobody comes close to Honda’s reputation for fuel economy.”

Toyota’s Gains

Ford’s U.S. sales rose 4.8 percent in the first four months of the year, to 717,480 light vehicles, less than half the industry’s gain of 10 percent. Ford’s U.S. market share has fallen to 15.4 percent this year from 16.2 percent last year, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey.

Toyota, which suffered supply shortages last year after the earthquake and tsunami in Japan, has seen its U.S. sales rise 12 percent this year and its market share grow to 14.3 percent from 14.1 percent. Honda’s U.S. sales have risen 2.2 percent and its market share has slid to 9.5 percent from 10.3 percent, according to Autodata.

Ford has several models that offer the best mileage in their category as rated by the U.S. Environmental Protection Agency, Farley said. Most consumers don’t view Ford as a fuel economy leader, he said.

“I can say best-in-class EPA rating on this or that,” Farley said. “But it’s going to require more than that to change minds.”

No Bailout

Ford borrowed $23.4 billion in late 2006, putting up all major assets including the blue oval logo as collateral. That helped Ford avoid the bankruptcies and bailouts that befell the predecessors of General Motors Co. (GM:US) and Chrysler Group LLC.

Ford continues to receive positive consumer consideration because it didn’t take a government bailout, VanDyke said. Consumers’ “favorable opinion” of Ford has risen 32 percent since the first quarter of 2008, VanDyke said.

“Not taking the money, people still today say, ‘You separated yourself from your crosstown rivals’,” VanDyke said. “Our favorable opinion has never been at a better place.”

To contact the reporter on this story: Keith Naughton in Dearborn, Michigan, at knaughton3@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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