Nielsen research shows that green marketing by auto companies continues to have a positive effect on consumer perceptions with 51 percent of consumers reporting that green marketing initiatives increased their consideration of the product. This is up 24 percent compared to 2010. Social media discussion about auto makers’ green marketing initiatives has also been more positive this year with a 44 percent increase in positive discussion versus 2010.

“Our research identifies how effective auto manufacturers are in raising awareness of their green products, initiatives, and innovations,” said Lois Miller, President, Nielsen Global Automotive. “We can then understand if they were able to change perceptions and consideration in a positive way among consumers.”

“We are thrilled that Nielsen Automotive has again chosen the Los Angeles Auto Show to host its increasingly important Green Marketer of the Year Award,” said Brendan Flynn, Director of Communications for the Los Angeles Auto Show. “Nielsen’s award provides an accurate and important gauge for auto makers and makes a perfect addition to the green story at the LA Show.”

Methodology
To determine the finalists and winner, Nielsen leveraged three research studies to incorporate awareness levels and perceptions across media types. The studies included:

• A custom survey of nearly 7,000 consumers’ cross-media awareness and perceptions of environmental messages by automotive brand
• Response data from 2.5 million viewers of national television advertising collected by Nielsen’s ad effectiveness measurements service, focusing on green automotive ads
• Measuring social media “buzz” sentiment within green-related discussion threads

Auto manufacturers that ran any national TV ads with “green” themes between October 2010 and September 2011 were eligible for consideration.

Nielsen went “under the hood” in China, the world’s leading automotive market, to survey and to better understand what Chinese consumers want when they shop for a new car. The survey reveals that today’s Chinese car buyer is more demanding in terms of what qualities and features they want. The most important factor attracting Chinese car buyers’ attention is the exterior design (25%) and vehicle performance (22%), significantly higher than the third and fourth priorities of interior (4%) and price (3%).

A new generation of car buyers
The next decade’s growth in the automotive sector is expected to be driven by consumers born in the 1980s and 1990s. These young buyers have different priorities when it comes to choosing a car. While car buyers born in the 1960s and 1970s set emphasis on the car’s brand image, its function and the purpose for which the car will be used, the new generation of buyers view cars as expressions of their identity and personality, making the car’s exterior styling a priority. The top purchase criteria in choosing a car for the generation born in the 1990s is safety (54%), followed by exterior design (47%), price (39%) and quality (38%).

Now is the time for car companies to begin a dialogue with this generation, listen to their ideas and better understand their needs and motivations. The first mover has the opportunity to get ahead of would-be followers.

Electric vehicles
With environmental awareness rising along with higher oil prices in recent years, more Chinese consumers are considering buying electric vehicles (EV), with a purchase intention of more than 50 percent. Compared to two years ago, consumers are willing to spend more for electric cars, and more than half (52%) of consumers are willing to pay a higher price for pure EVs, with a mean premium of  24,763 CNY, much higher than the 2009 level of 10,000 CNY. Consumers in Tier 1 cities such as Shanghai are willing to pay even more for EVs, 32,000 CNY on average.

The key audience for electronic vehicle manufacturers should be trend-driven consumers, who are looking for a unique model and are willing to sacrifice some cost efficiency for a green cause. Meanwhile, EV manufacturers should apply a differentiated marketing strategy combined with a novel approach to help convert the trendsetters into early adopters, who will in turn lead the market and contribute to the development of the industry’s latest selling point.

Turbocharged engine
Compared with dual-clutch automatic transmissions and fuel injection technology, turbocharged engines have the greatest name recognition of technical features, and they are a first priority purchase option for 87 percent of consumers considering a car purchase.

Turbocharged engines attract the more sophisticated automotive consumer: consumer awareness and willingness to buy turbocharged engines are much higher among the medium- to high-price car consumers (priced 120,000 to 300,000RMB) than the economy car consumers. The number of car models equipped with turbocharged engines is very limited in the Chinese market so the high demand of the more sophisticated automotive consumer is far from satisfied.

Telematics
Of major interest and purchase consideration are telematics (GPS, on-board navigation), with 58 percent of consumers ranking telematics as their top consideration. Pre-collision safety (36%) and night vision system (37%) also registered strong interest among all generations of car buyers.

Leveraging social media to connect with consumers
To hear what Chinese consumers are saying about cars, Nielsen monitored e-forums and the social networking site Weibo. Social media in China has boomed, attracting millions of users and the interest of marketers who seek to use it to connect with current and potential customers. Based on Nielsen’s analysis price (39%) was the most discussed issue, followed by efficiency (36%).

Steven Li, CEO of China Nielsen Online Division, suggested that car manufacturers strengthen their online presence to better connect with potential buyers help them win word-of-mouth. Li outlines four classic types of online car consumers:

1. Potential buyers, who have no clear models in mind and are seeking information and viewpoints to help them in their decision
2. Potential buyers who have a clear model in mind
3. Those who have newly purchased vehicles
4. Grass-roots automobile experts

Consumers’ spontaneous comments about cars, whether they are positive or negative, can play an important role in purchase decisions, and car brands need to know how to engage consumers, particularly on social media.

The winning TV ad, “This or That,” features the hamsters cruising around in a Kia Soul playing a popular 90’s hip hop track, “The Choice is Yours.” The spot cleverly compares Soul’s unique comforts to other boxy rides – represented by toasters, washing machines and cardboard boxes – while the hamsters rap along to the song’s lyrics, “You can get with this, or you can get with that.”

Last year, Kia took home the top award when with the debut of their music-loving hamsters in the commercial “A New Way to Roll.”

“Despite another challenging economic year for the auto industry, it is great to see the industry has not lost its focus on producing engaging and highly effective advertising,” said Lois Miller, President of Nielsen’s global automotive unit.

The Nielsen Automotive Advertising Awards, which were presented at the 2011 New York International Auto Show, is the only awards program measuring effectiveness of automobile TV ads.

Other big winners included:

• Best Green Ad: Ford Fiesta
• Best Sales Event Ad: Ford ‘Swap Your Ride’
• Luxury Campaign of the Year: Mercedes-Benz SLS ‘Triumphant’
• Spanish TV Advertiser of the Year: Toyota

The awards are based on response data from 2.5 million viewers of national television advertising collected by Nielsen. Nielsen measures the effectiveness of every ad and product placement on 24 measured networks. All national auto ads that began airing in 2010 were eligible for the award.

China’s economic growth has led to massive expansion across all consumer categories as its citizens become more affluent, and, in many cases, have discretionary income for the first time. But one sector stands out for growth even in China: automobile sales. Over the past five years, China was the only country in the world to achieve annual growth of more than 20%, and in 2010 alone, car sales will likely grow by 23%, according to Nielsen estimates. The big story, however, is not the size of that growth—sales of cars will consistently increase for the next few years—but where that growth is coming from: China’s lower tier cities. These and other issues facing China’s automotive industry were addressed today by a range of speakers at the Nielsen China Forum.

Shirley Ng, Director, Client Leaders, Automotive, The Nielsen Company, China, spoke of the challenges and opportunities for car manufacturers and retailers. “Private vehicle ownership is still low in China and we expect that the number of first-time car buyers will increase sharply in the next few years. Car owners in first tier cities like Shanghai are starting to trade up—good news for luxury models. But the real opportunity is in the tier two, three and four cities such as Shandong, Fujian and Guangdong, where the middle class is growing every year and their confidence as consumers has been rising faster than in tier one cities.”

Ng said manufacturers and retailers must understand the differences between the needs of consumers in lower tier cities compared with those in tier one cities, and noted that advertisers must approach these price sensitive car buyers creatively by focusing on brand building for the long-term.

To better understand these new car consumers, Georgia Zhuang, Director, Consumer Research, The Nielsen Company, China, provided an in-depth look at this group and the factors and themes that drive their purchase decisions. Lower tier consumers tend to be older than those in tier one, and their families are their top priority. Work is viewed as a way to increase their family’s quality of life and they tend to have fewer financial pressures. In short, they have positive outlooks on life and are confident about their futures.

Auto manufacturers and retailers need to market toward these consumers by finding the emotional linkage with their priorities and satisfying their basic needs. Zhuang noted that companies focusing on lower tier consumers would do well to emphasize fundamental themes such as economical, durable, safe, reliable, simple and plain exterior to consumers. It’s also necessary to build a trustworthy brand image that offers high value.

Since these consumers have little experience with or knowledge about cars (90% are first-time buyers) and have limited information, their purchase decision making is relatively simpler and quicker. Manufacturers and retailers should use a range of media including the Internet and social media as well as physical displays at various locations. Dealer network expansion and training of the sales and service associates will further enhance brand visibility and reputation—key factors important to lower tier consumers.

Mirroring the growth in car sales in China has been advertising spending. From 2009-2010, the auto industry posted the highest growth in spending of any industry, up 24 percent and indicative of the increased level of competition between manufacturers. But that high level of spending has led to decreased efficiency in mature markets whereas lower spending in lower tier markets has yielded strong results.

Given this marketing environment, Kenneth Tan, Associate Director, Analytical Consulting, The Nielsen Company, said that car makers need to focus on long-term growth by consistently advertising to build brand equity. “Marketing helps build market share in the near-term, but also helps grow brand Equity in the longer term. Without incremental activities to bring in new buyers and respond to competitive activities, brand equity will erode. ”Based on Nielsen research, Tan noted that up to 35 percent of total auto sales are based primarily on brand equity.

To determine the finalists and winner, Nielsen leveraged three research studies to incorporate awareness levels and perceptions across media types. The studies included:

• A custom survey of nearly 7,000 consumers’ cross-media awareness and perceptions of environmental messages by automotive brand
• Response data from 2.5 million viewers of national television advertising collected by Nielsen’s ad effectiveness measurements service, focusing on green automotive ads
• Measuring social media “buzz” sentiment within green-related discussion threads

The results showed that consumers have definite high awareness of environmentally friendly ad campaigns, with eight in 10 consumers in the cross-media awareness survey reporting seeing “green” auto ads recently. Also notable is the generally positive nature of discussion surrounding green topics for auto brands in consumer-generated media (CGM). Less than 1 percent of discussion was negative on average. This is also reflected in the number of consumers who said green ads shift their opinion of the brand, with two-thirds saying their opinion was more positive after seeing these ads.

“We have seen a heightened awareness among consumers for environmental initiatives in the auto sector,” said Lois Miller, President of Nielsen Automotive. “The key benefit is that with this awareness is also a more positive view of the brand and ultimately, this can help auto manufacturers reach consumers that may not have considered their brand before.”

Marketing around “green” vehicles continues to be an important factor in driving sales for the auto category. In a recent  study of more than 1,700 U.S. consumers and their electric vehicle purchase consideration, Nielsen saw that seven  out of 10 U.S. consumers would consider purchasing an electric vehicle, and 63 percent would consider them for their positive environmental impact. However, price continues to be a barrier with only 35 percent saying they would pay more for these vehicles. Also, looking at online discussion (“buzz”) about EVs, consumers still often mention anxiety about how far these vehicles can go on a charge. With the current limited availability of charging stations, some question the wide-spread use of a car that needs to be charged frequently.

In order to overcome these obstacles, it will be crucial for marketers to get the message out about the benefits of electric cars and other green vehicles by effectively touting points such as fuel efficiency and environmental friendliness. As these vehicles become available for purchase, marketing will play a key role in providing consumers with solid evidence to make the purchase.

Recognizing the potential impact a successful marketing campaign can have on the industry, Nielsen has joined with the Los Angeles Auto Show to create the 1^st annual Nielsen Automotive Green Marketer of the Year Award. Measuring the most effective green marketer will focus on understanding which auto brand was able to raise the awareness and change perceptions around environmental issues most effectively, and will be based on three components:

1. A custom survey of consumers to understand their awareness and perceptions of environmental messages by manufacturer
2. Response data from 2.5 million viewers of national television advertising collected by Nielsen, focusing on green automotive ads
3. Measuring internet “buzz” sentiment changes in social media within green-related discussion threads

Stay tuned for more information regarding the finalists and winner of the first Nielsen Automotive Green Marketer of the Year Award, which will be announced November 18 at the LA Auto Show.

When asked if they would be willing to pay more for an electric car than the cost of a conventional car, 65% of U.S. consumers said they did not want to pay more for electric cars. In the U.K., more than three-quarters (76%) were unwilling to pay more. Of those who accepted the price differential, slightly more than half of consumers in both countries (51% U.S., 57% U.K.) said they would not be willing to pay more than $5,000 above the average price of a standard vehicle.

“Although electric cars have been around for a while, big car manufacturers like Chevrolet and Nissan have been ramping up their advertising efforts recently as they get ready to introduce their new offerings – the Chevrolet Volt and Nissan Leaf,” said Sallie Hirsch, SVP of Research for Nielsen’s automotive unit. “There are some obvious challenges, such as the higher cost of electric cars, that advertisers will need to navigate as they develop their marketing campaigns, but the overall interest shown by consumers in this survey is promising. As electric vehicles are brought further into the mainstream and begin gaining in popularity, the cost will likely come down and many of the other challenges will be addressed as well.”

Through its advertising effectiveness and engagement tools, Nielsen has begun measuring the new national TV ads that debuted last month for the Nissan Leaf. The Leaf ads are part of Nissan’s new “Innovation for All” campaign, which has been gaining traction across Nielsen’s key resonance metrics for recall and likeability.

The increase in advertising is a sign of a rebound in the auto industry, which has struggled amidst the prolonged recession and weak consumer confidence. Of the top 20 product categories in U.S. ad spending, the largest growth in the first half of 2010 was seen in automotive as auto sales began to improve. According to Nielsen, in the first six months of the year, more than $42 million was spent in the U.S. advertising the Chevy Volt and Nissan Leaf brands. Overall, $3.5 billion was spent on auto advertising in the first half of 2010, up 27% over a year ago. The increased automotive advertising was driven largely by spending by Chevrolet parent company, General Motors, which was up 95% over last year.

Despite modest improvements in consumer confidence and a resulting boost in car sales, Nielsen’s survey on electric cars, which was conducted in September among more than 2,300 people in the U.S. and U.K., also showed that inflated gas prices continue to weigh on the minds of recession-weary consumers when considering the purchase of a new car. In fact, despite the global push towards choosing more fuel-efficient and environmentally-friendly cars, 78% of consumers in both the U.S. and U.K. said their main reason for wanting to buy an electric car was to “save on fuel costs.” Helping the environment ranked second on consumers’ list of priorities. While more UK consumers (70%) than U.S. consumers (63%) were likely to cite the environment as a reason for going electric, U.S. respondents were 60% more likely than their U.K. counterparts to say they would buy electric to support the companies making the vehicles.

Motivating Factors
In a recent Nielsen online survey, car owners from Russia’s largest cities cited practical reasons such as wanting a safer or better equipped car when considering an automobile change. But while sensible reasons dominate, there is evidence that less practical motives are driving forces as well. The Nielsen study showed there are signs the Russian consumer market is recovering and that discretionary spending like car purchases is expected to grow. The research reveals an increasing importance placed on emotional motivation—one in five car owners say they want to change a car because they are ‘bored’ with the current one.

Price is Paramount
While Russians are feeling confident in the stability of their personal finances—two in three expect the state of their finances to remain the same or improve over the next 12 months—there is caution. One-third of those planning a car change in the next three years are prepared to spend conservatively by choosing lower-priced brands, more economical models, and basic packaging. Consumers cite the growth of car prices in Russia and increased interest rates as factors.

Payment Plans
Russian car owners plan to fund a vehicle purchase mostly through loans. Loan demand is expected to grow in the very near future—44% of those planning to buy a car in the next 12 months intend to use a loan; and both large, well-known financial institutions and small banks will have an equal crack at winning consumer attention. However, receiving a loan from a recognized bank is less of a priority than securing a loan with the most benefits. Options like early payoff without penalty and simple, clear credit terms are favored by consumers.

Funding Options
The Russian government’s recently launched subsidy program to encourage sales of Russian-produced cars received a lukewarm reaction—only 15% said they are interested. But 37% of consumers are ready to use the trade-in option offered by auto dealers.

Car dealers have an opportunity to better educate prospective buyers about trade-in options. Sparse or unclear information about the service and its benefits was cited by 15% of consumers who said they do not have enough information to make an informed choice. The majority of skeptics believe they would make more money selling their cars directly.

Cautious Optimism
The continuing uncertainty in the stability of the national economy and the current high rate terms of loans make one in three potential buyers moderate their appetites to avoid risking the family budget. A reduction of loan rates and the active promotion of alternative car sales programs would likely provide a timely solution to help car owners receive what they want without breaking the bank.

Georgia Zhuang, Head of Auto Research, Nielsen Greater China

Chinese consumers are becoming more realistic when it comes to purchasing an automobile, with the majority of respondents in Nielsen’s 2010 China Auto Trends Monitor Report citing both ‘quality of life’ and ‘ease of transport’ as the most important factors when making the decision to buy an automobile.

As a result of the decreasing impact of government stimulus policies and rising house prices, overall intention to buy an automobile in the next 12 months has fallen 21% year-on-year to only 32%. Meanwhile, 40% of those potential automobile owners said they would spend only RMB 80,000 – 120,000 (roughly $12-18K U.S.) on purchasing an automobile. This change in behavior is reflected in consumers’ financing methods: most consumers will still pay in full with cash; subsequently, the number of consumers who would choose to seek a bank loan to finance the purchase of a new automobile has increased since last year—up four percentage points to 29%. While consumers have returned to a more rational approach to purchasing, Chinese brands have been expanding their lines and launching intensive marketing campaigns over the past year, quickly overtaking American and Japanese brands as the top choice for potential automobile buyers.

Stylish and Sporty Selections
Demand for private ownership of automobiles has become a symbol of quality, of a person’s values and of their personality. Sixty-five percent of respondents think that design is the most important factor in a new automobile. While demand for comfort based on a safe design is gradually increasing, a stylish and sporty look is favoured most highly among consumers, with women preferring a stylish look, and men preferring something sportier.

In particular, the ’stylish’ element should be most prominent in the front of the automobile, as over 70% of consumers, and especially potential owners, said they would judge how fashionable an automobile is by looking at the front. Nearly half of those who responded think that the rear of an automobile can also represent how ‘fashionable’ it may be. Similarly, consumers believe that both the front and rear ends of an automobile are best for displaying its ’sporty’ features.

A car’s body type is also able to satisfy consumer demand for a sporty or fashionable look, and there is huge potential for innovation from all brands across the market. For first-time buyers, a sedan is no longer the only option for a family automobile, and SUVs, hatchbacks and many other styles are now equally considered. Provided that companies and brands alike meet consumer needs and show a sense of creativity, there is a huge opportunity for stylish and sporty designs in everyday automobiles, SUVs and sports cars.

Environmental Considerations
As consumers are becoming more aware of the importance of environmental protection, their interest in alternative energy technologies is also increasing, with attitudes changing in particular towards alternative energy sources for automobiles. The majority of respondents said they would consider buying an alternative energy car in the future—in particular they would change from a traditional petrol-run car to a smaller, hybrid car—as they feel the impact of this change on current automobile driving behaviour would be quite small. In reality, this kind of thinking has not fully developed into actual behaviour and an understanding of alternative energies available on the market is still very low.

There are three other main factors that determine a consumer’s decision when choosing an alternative energy use car: ease of use, maturity of the technology and the cost of purchase and maintenance. Introducing subsidies to promote the use of these kinds of cars is therefore, a must. Nielsen discovered that an average of 20% of consumers cited government subsidies as a reason for choosing an alternative energy car and a subsidy of 30% of the cars’ ticket price is enough to satisfy a vast majority of people.

Factors that hinder consumer purchasing can be dealt with through marketing communications. Manufacturers have a responsibility to not only strengthen consumer understanding of alternative energy technology—through effective advertising and marketing events, but also to make alternative energy more practical and accessible through continuous breakthroughs in, and improvement of, technology.

As the government and manufacturers continue to work together on incentives and infrastructure, consumers will come to have more trust in alternative energy automobiles, which will translate into an increase in buying behavior.

In the winning TV ad, streets are occupied by hamsters running in place on exercise wheels until a red Kia Soul pulls up to a stoplight as the passenger window rolls down to reveal a trio of music-loving hamsters who have found “A New Way to Roll.”

The ad was found most effective by Nielsen’s panel of 2.5 million television viewers who answered questions about how much they remembered about the programs and commercials they watched the previous evening throughout the past year. Only TV ads that launched in 2009 were eligible for nomination.

“Our data show that truly effective advertising starts with a great creative idea,” said Lois Miller, President of Nielsen Automotive. “When you combine that idea with a memorable and unique hook that grabs the viewer’s attention, you are going to get the results that we saw from Kia this year.”

This was the fourth year of Nielsen’s Automotive Advertising Awards, which were once again held at the opening breakfast of the New York International Auto Show. Nielsen also distributed awards to Ford for “Green Ad of the Year” and to Toyota for “Sales Event Campaign of the Year.”

The Social Media Effect
But it was Kia whose ad stood out as the best of the best. To maximize its success on TV, the company carried the message to social media, which is now becoming standard practice for marketers both in and out of the auto industry.

“Even before we could get our own copy of the ad online, fans had already found it and posted it on YouTube,” said Michael Sprague, Kia’s Chief Marketing Officer. “Within a couple of months we saw that the ad had a total of over a million online views.”

As Nielsen’s Miller is quick to point out, consumers aren’t just viewing videos on the web; they’re talking about them as well.

“Social media is a living, breathing channel and many companies are scrambling to understand it,” said Miller. “Fortunately, Nielsen can measure social buzz and can give insight into whether marketers are creating positive or negative sentiment in these spaces.”

Watch Automotive marketers and consumers discuss social media’s impact

Whether viewed online or over the airwaves, consumers were able to connect – and connect positively – to Kia’s marketing effort. And that means TV and Internet audiences haven’t seen the last of those hamsters.

“We never envisioned this ad being as popular and effective as it’s become,” said Sprague. “Stay tuned. You’re going to see more hamsters coming this summer.”