Honda Pouring Over $50 Million Ad Dollars Into New Music Platform, Honda Stage

As the United States' fifth-largest automotive advertiser in terms of total spending (according to 2012 figures from WPP’s marketing analytics firm Kantar), Honda has relied heavily on television to achieve the mass-audience reach it requires for the latest editions of tentpole vehicles like the Accord, Civic and Fit. But increasingly, the automaker has found TV a challenging place to reach its biggest growth segment, 20-to-35-year-olds, who are increasingly on the go, on their phones (U.S. smartphone penetration reached a record 65.2% in 2013, per ComScore) and fast-forwarding through ads when they watch linear television at all (DVR penetration reached an all-time high of 49% of TV households in 2013, according to Nielsen).

That’s why Honda is allocating its entire cable budget -- “and some more,” says the company -- into music this summer. As announced at an event from Honda’s campus in Torrance, Calif. on Wednesday, June 11, Honda has created a new live music platform, Honda Stage. The company is teaming with seven partners to amplify Honda-branded experiences at music festivals (the mainstages at Founders’ Governors Ball, C3’s Austin City Limits and Live Nation’s Music Midtown in Atlanta); on mobile (Revolt TV’s iOS and Android apps, broadcast from its Hollywood studio); on the road at its 13-year-old franchise the Honda Civic Tour, booked by The Marketing Factory; and with a series of custom, exclusive concerts with Live Nation, on the radio with Clear Channel, and online with YouTube and Vevo.

“It’s big a play for us, because this is very expensive, and much bigger than the cost of a few experiential events,” says Tom Peyton, Honda’s associate VP of advertising. “This is us moving into the big-time content marketing business.”

In total, Honda estimates it will reach over 1 million people in-person at over 200 live events, with a combined 2 billion impressions from the multimedia content. The total spend is valued to be in excess of $53 million, Honda’s measured U.S. cable ad budget from 2013, per Kantar. Honda’s media-buying agency MediaVest and its branded-entertainment practice Liquid Thread are spearheading the media plan, while creative agency RPA is overseeing brand messaging and campaign work.

“Just running ads on cable TV and various places isn’t working the way it used to,” Peyton says. “We have some new youth products coming out -- a new Fit, a new small [compact utility vehicle] called the HR-V coming later this year, and the Civic is still a big product for us among under-35-year-olds. At the end of the day, millennials and music is a big focus for us, and we like the emotion music brings. And with these new products, we wanted to dial up music even bigger.”

To further expand on that success, this year’s Honda Civic Tour will be split up into three smaller outings with three different genres – alt-rockers Grouplove and Portugal. The Man will tour amphitheaters, while power-pop act American Authors and Latin DJ trio 3ballMTY will each play clubs and small theaters. Content from select performances will live on the Honda Stage YouTube channel as well. Tickets for the first round of Honda Civic Tour shows went on sale Wednesday.

Peyton also reports a direct impact on car sales from the Civic Tour over the years, but declined to share specifics. Instead, he points to a 34% lift in purchase-consideration as measured from ticket-buyers when compared to prospective auto-buyers who didn’t attend the tour. “It helps us know that we’re fishing exactly where the fish are,” Peyton says.

New this year is a partnership with Clear Channel that will feature Honda-branded experiences once a month for the next year, beginning in July with a to-be-announced performance from the IHeartRadio Theater in Los Angeles. Content will live on-air and online as well, with Honda enabling new ways to present intimate, exclusive artist performances. Greg Glenday, senior VP of Clear Channel Connections, calls the Honda program “unique and super significant,” and a first for an auto brand in terms of size and scope. “It’s really a brand partnership rather than a specific car launch with a budget. We’ll be fitting a lot of different pieces together over time.”

Digital video is a heavy focus of Honda’s 2014 strategy, and that’s mirrored by a lot of advertisers. In 2013, brands spent a record $2.8 billion on online video ads, a 19% increase from $2.3 billion in 2012, according to the Internet Advertising Bureau. And with music content becoming a top draw on platforms like YouTube and Twitter, it’s no surprise that music was a key focus of this year’s NewFronts, where over two dozen online platforms pitched their wares to advertisers in hopes of scoring a larger chunk of the $20 billion spent on the TV marketplace.

One particularly large bet being placed on online video is Live Nation and Yahoo’s announced plans to live-stream a different concert every day for a full year, set to kick off in the coming weeks. Kellogg was announced as a launch sponsor, and though Peyton finds the platform “very interesting as an advertiser,” he wonders if the audience may still skew too old for his millennial target. “I’m interested to see if I can get a better bounce from my ad dollar out a program like [Honda Stage] rather than just running an ad in front of Katie Couric’s show on Yahoo. Not to say I don’t value Katie Couric’s program, but that’s not a lot different than me just saying, ‘There’s also a new program on CNN, so let’s run an ad there.’ There’s different ways to reach this crowd.”

Instead, Honda and Live Nation will team for a series of bespoke concerts that will be distributed by Vevo and Live Nation's own digital channels. “This is the first time I’ve seen an automotive company really look at music in a holistic way, from live content to bringing key partners together that all complement each other,” says Russell Wallach, Live Nation’s president of sponsorships. “It’s a very strategic, long-term commitment.”

Honda's amped-up investment immediately places the brand among the most active spenders in music, let alone automotives, which for years have been led by Chevrolet. The brand's Molly Peck, director of U.S. advertising sales, has ranked on Billboard's Power 100 for the last two years for the GM brand’s industry-leading support of key events like the Grammys, SXSW and the CMAs. But in recent months, other marketers like Ford, Toyota, and Kia have all been stepping up their alliances with artists, content partners and key festivals.

Perhaps most interesting is Honda’s long-term support of the Governors Ball festival in New York City, which just wrapped its fourth year this past weekend. Honda has been involved since 2012, and has seen an impressive return on investment for a market perceived to be less reliant on car owners. “People have a very short-sighted view of the auto industry, like it’s ‘I don’t need one,' but New York is actually our largest market in the U.S., and Brooklyn alone is a 20% Honda market,” Peyton reports.