Ford Motor Company (F) Is One Step Ahead of Its Rivals

At this point in your investing life, you already understand how important an advertising campaign can be to the success of any product. Quite often, superior products can go the way of the dinosaur because of bad marketing decisions. That’s why I pay close attention to marketing and management when I research my stocks.

To attract a younger consumer, it takes a different approach — one that Ford Motor Company (NYSE:F) is excelling at. It’s been using a different strategy in some of its marketing ploys by creating buzz through bloggers and social media. It’s had much more marketing success than Detroit rival General Motors Company (NYSE:GM), and I believe Ford is again a step ahead in communicating to its next generation of buyers.

Will this strategy ultimately flop? Will it give Ford a drastic advantage going forward, or will others simply copy it?

Devil in the details
Ford Motor Company (NYSE:F)’s Fiesta campaign will be based on unique voices from 100 agents in social-media blogs and other mediums. Ford provides the agents with gas, insurance, cameras, and any other equipment desired to create quality content. Videos will be posted on a Fiesta website and have the potential to be turned into TV ads, while outstanding pictures or articles will be used for print campaigns. It will kick off in May and span the country throughout the entire year. It will also have prominent placement at sporting events, on TV, at music festivals, and, of course, on social-media sites.

I’ve heard arguments that it could flop, much like the “Steer the Script” Super Bowl ad for Lincoln that took ideas from users. But the two concepts are as different as night and day. The Super Bowl ad took a collection of random ideas, not actual user experience. The key to making an effective marketing campaign, speaking from experience, is to understand the product from consumers’ eyes. That’s the greatest way to create quality firsthand experiences and selling points. Ford Motor Company (NYSE:F) can then take this valuable content and reproduce or polish it with its marketing and ad agency team.

Power to the people
Ford’s 2014 Fiesta will be its first completely user-created advertising campaign, a unique twist from the typical automotive strategy. In 2009, Ford used a smaller version of the strategy for the Fiesta that ended up being highly acclaimed and groundbreaking. The original movement had its agents tally an impressive 1 million miles in their Fiestas while creating more than 50,000 pieces of advertising content that generated almost 30 million views. After all was said and done, Ford Motor Company (NYSE:F) got 132,000 requests to receive Fiesta information when the car arrived at dealerships, with 83% from shoppers who had never owned a Ford and 30% being younger than 25. Brand loyalty is a huge factor in choosing a vehicle. To see 83% of the total interest from those outside the Ford brand is a very promising statistic that should catch competitors’ eyes.