Thursday, March 17, 2011

Hip Hop's Far Reaching Corporate Impact

On Super Bowl Sunday last month, Chrysler dropped a cool $9 million dollars for a 2-minute commercial, the longest in Super Bowl history. The commercial showed gritty, emotional everyday pictures of Detroit and Detroiters and asked, “What does a town that’s been to hell and back know about the finer things in life?” The commercial ended with Chrysler’s new tag line: “Imported from Detroit.”



The commercial set the internet ablaze. Traffic on Edmunds.com, the premier online automotive information site, spiked. Chrysler-related searches increased by 267% and 1,619% for Chrysler’s new 200, featured in the ad. Chrysler’s bold, profound commercial was ranked by many as one of the top commercials of the Super Bowl. When Sergio Marchionne, CEO of Chrysler, gave his execs a sneak-peak of the ad, many were reportedly close to tears.

Why was this commercial so memorable, moving and so successful (not to mention expensive and risky)? Aside from featuring a battered Detroit now purpotedly rising from the ashes and coming on strong, Chrysler decided to also feature an infamous Detroit native. Perhaps like the automobile industry itself, this Detroit native plateaued several years ago and seemed to fade in import and impact. But now, on a comeback himself, hip hop superstar Eminem can speak for a city and citizenry that are seeking to rise to a new found prominent place.

The irony in this interesting circle of corporate risktaking is that, as reported by Forbes magazine, Marchionne himself hesitated before deciding to make Eminem the face of his franchise in this expensive outlay of shareholder value. Marchionne admitted, “This was not an easy choice. . . . Apart from the money involved . . . and this is pretty expensive stuff, but you know, the choice of the topic, the choice of the characters in the thing were not easy choices. I had to think about this really long and hard. . . . You know, I love Eminem but . . . I also know that some of the choices of language that he has made are things that are not what I would consider to be commonly shared.” Marchionne necessarily treaded a delicate line in featuring the hip hop bad boy who is famous for hard-core lyrics and profanity, as well as bouts of homophobia and misogyny.


Eminem’s manager, Paul Rosenber, explained that the ad “started off as a request to license music but after . . . learning more about [Chysler CEO] Sergio Marchionne's vision, we realized there was a lot in common with Chrysler's story as it relates to Detroit and Eminem and his ability to overcome. We think the video we made with Chrysler is a statement about the passion of the company and the City of Detroit and we are proud to be a part of it."

Marchionne eventually overcame his reluctance to use Eminem as his spokesperson, recognizing how much the rapper has in common with the automaker. “[Eminem] represents part of America that I think is important as hell. I think it’s at the heart of what we are.” OK, not everyone likes the rapper’s music, Marchionne conceded, “but a lot of what he is, is us, you know? I mean there’s a sort of seriousness about that kid . . . which is true of [Chrysler]. The fact that we’re coming out of nowhere, right? A lot of people last year asked us, you know, are you still going to be here in 12 months?”

Marchionne is convinced. The question is, are the shareholders of Chrysler?

17 comments:

  1. From a shareholders perspective, I would likely be very happy about the surge in interest in my product. This was certainly a risky move, but from the view of most investors, the only thing that matters is the outcome. However some investors may not be comfortable with the direction the Corporation is going and may sell shares as a result which is never a good thing for the stock price.

    Personally, I would have been very hesitant as a CEO to take such a huge leap with someone who has used such profanity with reference to his children's mother, and his mother personally. I could see this whole situation having gone the other direction, with all the shareholders up in arms with the CEO for taking such a risk. This was far from a sure fire outcome, but this is also how Corporations revamp their images and move in a different direction. Chrysler has not traditionally been seen as a trendy car, but since the commercial this perception has obviously been changing.

    Additionally, I think it is impt. to note that the revised version of the commercial, which has been showing since Super Bowl Sunday, does not have Eminem in it. (still uses his song) This is a financial decision, as well as a decision to not overstep the bounds and make Eminem part of Chrysler. B/c at any point Eminem could do something stupid, and Chrysler does not want him associated that closely with their product.

    Michael M.
    Bus. Org.

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  2. Dre,

    As a PR professional for the 16th largest city in the US, this commercial was by far my favorite---for a number of reasons.

    Although this campaign was pricey and risky (a major bailout recipient spending $9M for a Super Bowl ad featuring a controversial rapper to boost its image), it's my opinion that the decision to move forward with this campaign was brilliant.

    The "Imported from Detroit" ad has accomplished a great deal...this commercial has garnered a tremendous amount of attention (especially for the Chrysler 200)...restored a sense of pride in consumers for buying American-made goods and provided a huge brand lift for Detroit, a City that has been to economic "hell and back".

    Kudos to Chrysler for featuering Em....I can't think of better way (or person) to illustrate the "come back" of Chrysler and Detriot. The parallels that exist between Em, Chrysler and The Motor City resonates with millions of consumers.

    As a shareholder....I'd be pleased with this campaign. According to Edmunds.com, shopping consideration for the 200 jumped more than 1,600 percent following the Super Bowl broadcast, the biggest boost for any automaker. Overall, the Chrysler brand got a lift of 267 percent.

    In addition, reporting service BrandIndex said that, of the 30 or so brands that advertised during the event, Chrysler was one of the most improved in terms of brand perception among consumers.

    As a civil servant, I'd argue that $9M for the Super Bowl ad was the best money Chrysler ever spent and the best publicity Detroit has ever received. Detroit has shouldered the economic burden of the 2009 Chrysler bankruptcy in addition to several other issues. Census data released Tuesday show Detroit's population has plunged 25% since 2000 to just 713,777 residents.

    Chrysler's "Imported from Detroit" campaign boasts of Innovation, Economic Growth and Mid-Western Values....important elements needed to restore both Chrysler and the City of Detroit.

    Stefphanie
    Columbus, Ohio

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  3. stefphanie:

    insightful post. thank you for your input, particularly as a professional in public relations. i agree that $9m could hardly have been spent better by chrysler, particularly in making inroads with new consumers.

    michael:

    i think you make an excellent point in connection with the high level of risk that the chrysler ceo undertook with this commercial and ad buy. still, the maxim of "high risk, high reward" keeps coming to me in connection with this commercial and movement. i think that the high reward is assured here.

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  4. I would like to agree with Michael, partially. I agree with him that the outcome appears to be positive. As your article indicates, Chrysler appears to have enjoyed a boost in searches and inquires, but more importantly a boost in the appearance of being viewed as trendy, as Michael has stated. However, I think as a stockholder I might be more upset about a separate facet of this huge payout, discussed briefly below.

    As your article also says, it was $9 million for the time slot, but with licensing fees and other expenses, I thought some estimates were that the entire commercial was significantly higher. Regardless, my point is that maybe Chrysler should have taken this $9+ million dollar commercial payout and reinvested it into making their product better instead of trying to sell a car line that had bankrupted them. My point is that maybe it should have tried to improve their product rather than their image.

    Perhaps, I am the only one of this opinion but it seems to me at least, that people know Chrysler exists as a car company, but what I also know is that their cars do not seem to add up to those of other companies, whether it be based upon quality, price, or luxury. So, instead of burning all this money on promoting an already well-recognized and well-acknowledged name, maybe try to up those MPGs to 30 or toss in an additional cup holder in that luxury sedan. This would be the sort of investment that I would rather put money behind.

    Jacob S.
    Bus. Org.

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  5. Personally, I think Chrysler's decision to spend $9m on a 2-minute commercial was risky, yet a successful business judgment decision. I think business as a whole is all about risk taking. Prof. Cummings mentioned earlier and in class all the time that the higher the risk, the higher the rewards. Especially with the current economy, it was important to remind Americans to support an American automaker to help rebuild a stronger economy.

    On a side note, I also think the message portrayed in the commercial touched many people because a friend of mine just bought the Chrysler 200 Sedan in support of American automakers.

    Marianne Monkam
    Bus Org.

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  6. This commercial was a huge marketing success. The evidence of that has been shown from the increase in the interest of the product as stated through statistics provided above by Prof. cummings. The reason this commercial is so memorable and effective is because it features emotion and power that connects with people, as apparently it did with the executives who previewed it. When reading this I was reminded of a clip from Mad Men where marketer/advertiser Don Draper presents a product (slide projector) successfully because it connects emotionally with its potential buyers. You can see that clip here: http://www.youtube.com/watch?v=suRDUFpsHus

    Emotional connectivity is the most powerful way to gain or retain customers. In creating this commercial, Chrysler clearly put a lot of thought into the theme: Detroit (and Chrysler) is tough, has been through hell, and is back to do what it does best: make quality American cars, hence the clever "Imported from Detroit." This theme is what connected emotionally with the commercials viewers.

    This idea connects with a large portion of Americans because a large portion of Americans are struggling financially and feel like they've been to hell and back. Additionally, a large portion of Americans are from blue-collar, labor cities. Perhaps that is why the commercial resonated with me. Growing up in West Virginia makes me relate and connect with blue-collar values. I think the commercial also resonated because this is an American car company connecting with American values, particularly today, where foreign-made cars have a stronger hold on the auto market.

    Anytime a company is going to spend $9 million for 2 minutes that is a risky decision. And considering Eminem's history I understand why the CEO was concerned about using him. But ultimately I think the CEO felt using Eminem was best because he has always identified himself with his hometown, Detroit and, as Prof. cummings indicated above, Eminem himself is a representation of that theme. He’s tough, gritty, not perfect, but he has preserved. What other figure could Chrysler have used to create such hype, interest, and powerful emotion as Eminem? They could have used Kid Rock. He always affiliates himself with Detroit, but that’s where the emotional connection to the theme would end with him. I think that would be an example of a waste of $9 million.

    This commercial was successful because of the emotional connection it created. Eminem was a perfect fit for the theme. I think this was a well-calculated decision and a brilliant one. Those two minutes seemed to have arguably redefined the way America thinks about Chrysler. That is something that would get me excited if I was a Chrysler shareholder.

    John-Mark Atkinson
    Bus. Org.

    ReplyDelete
  7. This commercial was a huge marketing success. The evidence of that has been shown from the increase in the interest of the product as stated through statistics provided above by Prof. cummings. The reason this commercial is so memorable and effective is because it features emotion and power that connects with people, as apparently it did with the executives who previewed it. When reading this I was reminded of a clip from Mad Men where marketer/advertiser Don Draper presents a product (slide projector) successfully because it connects emotionally with its potential buyers. You can see that clip here: http://www.youtube.com/watch?v=suRDUFpsHus

    Emotional connectivity is the most powerful way to gain or retain customers. In creating this commercial, Chrysler clearly put a lot of thought into the theme: Detroit (and Chrysler) is tough, has been through hell, and is back to do what it does best: make quality American cars, hence the clever "Imported from Detroit." This theme is what connected emotionally with the commercials viewers.

    This idea connects with a large portion of Americans because a large portion of Americans are struggling financially and feel like they've been to hell and back. Additionally, a large portion of Americans are from blue-collar, labor cities. Perhaps that is why the commercial resonated with me. Growing up in West Virginia makes me relate and connect with blue-collar values. I think the commercial also resonated because this is an American car company connecting with American values, particularly today, where foreign-made cars have a stronger hold on the auto market.

    Anytime a company is going to spend $9 million for 2 minutes that is a risky decision. And considering Eminem's history I understand why the CEO was concerned about using him. But ultimately I think the CEO felt using Eminem was best because he has always identified himself with his hometown, Detroit and, as Prof. cummings indicated above, Eminem himself is a representation of that theme. He’s tough, gritty, not perfect, but he has preserved. What other figure could Chrysler have used to create such hype, interest, and powerful emotion as Eminem? They could have used Kid Rock. He always affiliates himself with Detroit, but that’s where the emotional connection to the theme would end with him. I think that would be an example of a waste of $9 million.

    This commercial was successful because of the emotional connection it created. Eminem was a perfect fit for the theme. I think this was a well-calculated decision and a brilliant one. Those two minutes seemed to have arguably redefined the way America thinks about Chrysler. That is something that would get me excited if I was a Chrysler shareholder.

    John-Mark Atkinson

    Bus. Org.

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  8. I agree with John-Mark that the commercial was a success because of the emotional connection it created. If I were a shareholder of Chrylser, I would also be on board with this commercial.

    However, the fact of the matter is that even though a corporation's main goal is to make profits for its shareholders, not all shareholders are going to agree on how to go about making those profits. Differing opinions and views is what makes the world go round. Even if this commercial proves to be a good choice for Chrylser in creating profits for shareholders, there may still be some shareholders out there who do not agree with the use of Eminenm in the commercial for whatever reason. I think that this is all part of doing business in today's society.

    Everyone may agree on the destination, but may disagree on how to get to that destination (profits). If shareholders diagree with the choices the corporation is making on how to make profits they can always sell their shares.

    Marjorie M.
    Bus. Org.

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  9. Chrysler should find that its commercial was a good use of its money. It is more than two months after the Super Bowl and we are still talking about Chrysler decision to use Eminem in its commercial. Eminem isn’t the face of Chrysler but more a participant in a Chrysler commercial. I agree with Michael that Chrysler made a decision to pull Eminem from the commercial, but I slightly disagree with his reasoning. Chrysler spent $9 million on a 2 minute commercial. Currently, it likely needs to conserve money. By cutting Eminem out of the commercial, it likely only pays him for the right to use his song in the commercial. I wouldn’t know, but when you risk $9 million on a commercial and your company is trying to make a comeback you probably want to conserve money in case your risk fails.
    While Chrysler’s decision may have been risky, from the numbers it looks as if it worked. Chrysler’s popularity has increased since the Super Bowl. Shareholders may be upset that they hear $9 million for 2 minutes but there is the saying you have to spend money to make money. The Super Bowl is the most watched television program each year. Men, women, and children of all ages and demographics saw the Chrysler commercial and undoubtedly had some type of conversation about it. Chrysler needed to read a large audience and there is no better opportunity. Stockholders might be surprised by the amount of money put into a commercial, but if people continue to buy the Chrysler 200 it will be worth the $9 million spent.

    Patrick

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  10. I can definitely see a shareholder being concerned with investing the money spent on the commercial in a different way, such as improving their product line. On the other hand, maybe it is not an issue of improving the product line. The product line could very well be quality. Rather, the issue could have been that the consumer awareness of the product line was substantially down. Chrysler, at the time, was not at the top of consumers’ minds. As shown by the statistics, the one thing that this commercial definitely accomplished was increasing awareness amongst consumers of Chrysler, especially in their 200 model. Stimulating such an interest and increase in awareness in a company thought to be down and out is invaluable. Therefore, I agree with some of the other commenters that should alone be well worth the $9 million that was spent on the commercial.

    - Ryan K.
    Bus. Org.

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  11. I agree with the big risks, big rewards idea behind this commercial. Chrysler needed to increase comsumer awareness of its new products, and portray their new motto, "Imported from Detroit." This commercial connected with a majority of Americans who are experiencing financial difficulties, just as Chrysler is - but the idea behind the commerical is hope, going from hell to back, and then coming out on top again. I think this commerical has been a great success based on the increased interest in Chrysler, and was well worth the $9 million.

    --Rebecca S.
    Bus. Org.

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  12. A reasonable shareholder is going to able to divorce themselves of their personal opinions towards the artist, and instead focus upon the impact that his usage has on the corporation. In this case the early returns--"Chrysler-related searches increased by 267% and 1,619% for Chrysler’s new 200"--are quite positive.

    The other thing to keep in mind is that Chrysler's situation to some extent cried out for a drastic measure like this. This is a corporation that's (apparent) demise has been widely chronicled by media throughout this country for the better part of a decade. With questions circulating in earnest as to whether they would even be able to operate in as little as 12 months, an ad of this kind provides a perfect antidote.

    David B- UC

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  13. This is one of the more moving commercials shown during the Superbowl. As stated already Eminem represents what Detroit and Chrysler are. I think that it is interesting that in the current versions of this commercial that Eminem is not shown. This may have been for financial reasons or fear of controversy resulting from the commercial.

    On the issue of the money that it took to create this commercial, I can see why it would take convincing to make the decision to spend. I think that this is really relevant to the article posted by Professor cummings regarding the graying of Boards of Directors. This is a decision that could have been made by a "younger" person maybe without so much concern because they would be aware of how Eminem could impact viewers. Whereas, this is also a decision that can't be made in any kind of extreme haste because of the cost.

    Also, the fear of controversy is definitely a legitimate concern. Chrysler has a lot of money invested into this ad and Eminem has has a lot of history that could impede on Chrysler's investments. But if we are giving Chrysler another chance, and Detroit another chance, why not give Marshall Mathers another chance?

    Lindsey Mc. Bus Org

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  14. I think corporate good will can be just as valuable to some companies as the amount of profits generated from a commercial like this one. It seems the general consensus is that most people have responded to the commercial positively, leaving with a better impression of not only the strength of Chrysler but of their cars and their impact on the community. However, I suppose this raises the question of whose opinion as to the company image is most important.

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  15. "I think corporate good will can be just as valuable to some companies as the amount of profits generated from a commercial like this one."

    Naturally I'd agree with this as a general principle, but in this case the two seem to be inextricably linked. Eminem has nothing to do with the engineering or design of Chrysleer automobiles- he is merely being used as an image to represent the corporation. To the extent that positive results have ensued (and the statistical data in the original post suggests that they have), I'd argue that based on the majority perception Eminem's use has yielded an upturn in 'good will'.

    David B- UC

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  16. I believe Chrysler took a big risk here - not necessarily for employing a rapper with "hard core rap lyrics" but because they decided to make their spokesman an entertainer who plateaued several years ago. As a struggling company, Chrysler gambled by selecting a comeback artist. Props to Marchionne, though - an increase in searches for the vehicle should certainly yield greater sales for Chrysler, resulting in increased profit for shareholders. The reasonable shareholder would support this decision as it increases interest in the corporate product, potentially leading to more sales of the vehicle.

    KMW - UC

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  17. Shareholder interest is important for Chrysler. As a corporate executive, one of Marchionne’s duties is to maximize shareholder profit and pay them dividends. In this case, it seems that he used the business judgment rule when deciding to make/air the ad. He and the shareholders hope that this was the right decision. The sales numbers, in time, will tell if this was the right decision.

    I really liked the ad. Its grittiness was great, and choosing someone with Detroit roots, Eminem, seemed appropriate, especially if the theme of the message was Detroit.

    EB

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