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Marketing and advertising insights for automotive suppliers

How – and How Much – Should Automotive OEM Supplier Brands Invest?

How – and How Much – Should Automotive OEM Supplier Brands Invest?

Even if you can’t spend a lot, you might want to spend differently.

Think about your brand’s presence in the automotive marketplace. How well known are you?

Consider McDonald’s. Or Star Wars. You’ve heard of them, right?

In 2016, McDonald’s spent $1.46 billion on advertising. That year, their revenue in the U.S. was $6.03 billion. That’s 24% of revenue spent to advertise a brand that’s already a household name.

Star Wars is already one of the most universally recognized movie franchises in history. Yet Disney spent over $500 million promoting the last Star Wars movie.

You’re never going to spend nearly that much, I know. But think about why McDonald’s and Disney does. The marketplace is inundated with messages. People are consuming so much content. For household-name brands to get the attention they want, they must spend accordingly. Which means they have to spend exorbitantly.

Regardless of the actual amount spent, companies in the automotive supply industry can follow a couple of good principles.

The 60/40 principle.

A study called “The Long and Short of It” examined spending activity by 10,000 brands over a 30-year period. The brands were categorized as either high-performing or low-performing. The high-performing brands invested 60% in brand-level messaging, and 40% in lower-funnel activation messaging designed to generate a more immediate response, and hopefully lead to an actual transaction. These companies know – an insight known universally across industries – that brand-level messaging is critical to customer awareness, confidence and trust. And over time, generating goodwill like this can have a profoundly positive impact on customer decision-making.

The 10:1 principle.

This ratio applies to how resources are allocated. For every dollar spent on creative development (establishing messaging strategy, ads, collateral, content assets, etc.) $10 should be spent communicating your message. Why? Consider the amount of content people are exposed to daily. How can anyone remember anything anymore? You aren’t just competing with other suppliers for your customers’ attention. You’re also competing with all the other messaging in the world. Great advertising and marketing only go so far. You still need to be seen and heard.

That explains why McDonald’s and Star Wars spend so darn much.

You’re an automotive supplier. You aren’t going to spend like McDonald’s. But you can adjust your thinking about how to spend, so as to be more effective in marketing your organization.

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Ernie Perich

As the owner and creative director of Perich Advertising + Design for more than 30 years, Ernie knows a thing or two about automotive marketing. He combines brand strategy with smart creative to help automotive suppliers strike a nerve. Contact

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