Ad Age, January 31, 2011

Fiat Launches 500, Slights Mass for 'Creative Class'

Italian Automaker Focuses on Event Marketing -- Think Art Basel, SXSW -- in Play to Reach Eventual Advocates

With familiar and storied brands like Saturn, Pontiac, Hummer and Mercury recently heading for the automotive graveyard, the idea of bringing back Italian brand Fiat to U.S. showrooms this month after a 27-year hiatus may seem like fool's errand. But don't tell that to Fiat CEO Sergio Marchionne, who is also CEO of Chrysler.

Mr. Marchionne, who presides over both companies after Fiat took over the Auburn Hills, Mich. automaker with the help of the U.S. government in 2009, says the time is exactly right to relaunch the Italian brand. "We want Fiat to be a global brand, and the 500 is the perfect vehicle with which to re-open the conversation with Americans," said the CEO.

The small four-seater 500, known as the Cinquecento in Europe, will begin arriving in dealerships starting with Los Angeles this month. By the end of the year, Fiat should have 130 showrooms open. All the dealers are also Chrysler dealers and are opening dedicated "studios" to show the 500 and the future products, which will eventually include Alfa Romeos.

To get the word out, Fiat is slow-walking its introduction with a viral and highly targeted event and digital approach, as well as public relations. "This brand appeals to the creative class, and you don't reach them with mass media," said Fiat USA CEO Laura Soave.

As a result, expect to see a big presence, she said, in a relatively few digital spaces, such as leading independent music, culture and fashion magazine The Fader. Event marketing has been, and will continue to be big for Fiat. At the top art show in the U.S., Art Basel in Miami last month, Fiat 500s, including painted "art cars," were out in force and the subject of a billboard that was being hand-painted during the show. The cars will also be showcased at the South By Southwest show in Austin this March.

Such events drive social-media followers, maintains Ms. Soave. Fiat USA so far has 26,000 fans, and 4,500 Twitter followers-both numbers she expects to climb fast once the cars go on sale. Digital ads won't show up until later in the year, depending on when showrooms are opened. TV and print are not in the plans for now, but don't rule them out for the future.

Fiat isn't just using a nontraditional marketing approach, but a nontraditional agency. When Ms. Soave, who previously held marketing positions at Volkswagen of America and Ford, was tapped to be CEO of Fiat USA last year, she said she was inundated with pitches from agencies that wanted to handle the launch. Some of them, she laughed, already had car accounts. In the end, she chose Southfield, Mich.-based Impatto, which had handled some event marketing at Ford when she was there. The boutique agency, run by Italian-American Michael D'Antonio, is handling creative duties and event strategy. Universal McCann is fielding digital buying and planning.

Ms. Soave said she wants to import the European positioning of Fiat. In the U.K., the car was launched in 2008 with a theme of "Everyday Masterpieces," with video advertising that juxtaposed the 500 with great everyday design pieces like the Bic pen, paperclip and kitchen whisk. Impatto spent time with Leo Burnett, which handles Fiat in Europe, "getting immersed in the brand," and created the line for the U.S.: "Life Is Best When Driven."

The 500 starts at $15,500, with a manual transmission, which is about $2,600 more than the starting price of a Toyota Yaris, but $4,000 less than a base Mini Cooper. The top-line car, the 500 Lounge edition, is $19,500. Cars come with a four-year warranty and three years of free maintenance.

Industry analysts say that, like any brand with history, it has some baggage to overcome. Fiat's quality in the 1970s and early 80s was atrocious. "We sold 100,000 Fiats in the U.S. in 1975, and we got 99,000 of them back for major problems," said industry consultant Charlie Hughes, who was head of marketing at Fiat then. That has certainly changed now, with Fiat having competitive quality rankings in Europe. "The key to restarting Fiat will be establishing the Italian Brio right out of gate ... establishing the personality," he said. Indeed, Ms. Soave said that playing to the brand's Italian roots will "very much be a part of what we say and how we say it."

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