Life-size dancing hamsters don’t come cheap, and Kia (000270:KS) has once again placed a big bet behind its fuzzy advertising franchise, which has helped spark a blistering period of sales for the Korean car company.
During the broadcast of MTV’s Video Music Awards on Sunday night, Kia rolled out its fifth dancing-hamster video. This time, the chubby trio was hitting the gym in preparation for a red-carpet appearance: Hamsters doing yoga. Hamsters on the treadmill. Hamsters in a pool. Finally, trim hamsters in tight tuxes. All in sync with Lady Gaga’s new single. There’s not much that’s normal about this pitch from a car maker.
Close your eyes and you can easily conjure up the formulaic commercial for a new car, with high-gloss footage of zooming machines against a stark landscape set to the intonations of a gravel-throated guy talking about torque and Motor Trend awards. Even the most elaborate car ads seldom involve movie-grade animation and effects, let alone the latest Lady Gaga tune.
Kia, however, has proven itself surprisingly shrewd with its ad budget. In the past five years, the company spent about $4.3 billion on advertising—just 2.6 percent of revenue, according to its financial statements. In the same period, General Motors (GM) forked out $24.2 billion (3.5 percent of revenue) while Ford (F) spent $19.9 billion (3 percent).
What did Kia get for its investment? Quite a lot. The company has doubled its annual vehicle sales in the five years that its advertising has relied on rodents, and it managed to punch through the clutter with a memorable message. Just try to remember any detail of the last Ford commercial you saw.
The price-tag for the latest Kia hamster spot had to to be sizable, although the company declined to put a dollar figure on the campaign. With a viral hit on its hands, however, Kia is able to get a bargain on unpaid distribution. By late this morning, the new hamster ad was fast approaching 1 million views on YouTube in part because Kia is careful to post its videos on the web long before they air elsewhere. The car maker can spend less on billboards, for example, if its hamsters are dancing across thousands of Facebook pages. “We’re feeling pretty good at this point,” said Michael Sprague, executive vice president of marketing and communications at Kia’s U.S. unit.
This is is the kind of social fuel that a lot of car companies and their advertising shops fail to fill up on. It’s interesting enough to see Jennifer Lopez tool around her old neighborhood in a little Fiat, but it’s not necessarily the type of thing one might e-mail to a friend or post on Twitter. Ditto for Clint Eastwood growling about Detroit.
The ad blitz comes at a critical time. Kia sales in the U.S. slipped by 3.1 percent in the first seven months of this year. Sales of the Soul, the hamsters’ ride of choice and Kia’s No. 2 model, were down slightly as well.
