NEW YORK/DETROIT (Reuters) - Ford Motor Co will partner with Yahoo Inc on a reality show this spring to promote its first electric passenger car, a move that comes as the auto industry is growing more pessimistic about the prospects for these kinds of vehicles.
The show, called “Plugged In,” will be broadcast on Yahoo’s streaming video site starting in May, Ford said in a news release on Tuesday. Three two-person teams will travel to 10 major U.S. cities, including Los Angeles and New York, and compete in a scavenger hunt while driving the Focus Electric.
The show is intended to help Ford reach the electric car’s target group - residents of major U.S. cities, particularly along the East and West coasts, where gasoline prices are higher than the national average. So far this year, Americans have been clamoring for more fuel-efficient vehicles as prices at the pump near $4 a gallon.
The Yahoo deal is also an example of Ford’s increasing use of social media to reach younger, more affluent consumers for less than a tenth the cost of a traditional marketing campaign. Ford declined to comment on its financial contribution to the show.
“We’re being much more targeted and building awareness of the product in a much more efficient way,” John Felice, general manager of Ford and Lincoln sales, said at a news conference at Yahoo’s New York office Tuesday.
But the second-largest U.S. automaker is launching its electric car at a time when industry analysts are expressing doubts about the near-term growth prospects of the vehicles due to their high prices and as traditional gas-powered vehicles become more fuel-efficient.
At the same time, other automakers are launching their own electric cars, making the segment more competitive. The Focus will compete with Nissan Motor Co’s Leaf, which was introduced in Japan and the United States in December 2010. Honda Motor Co Ltd, BMW and Fiat will join the fray, as will cars from start-ups, including Tesla Motors Inc.
Ford began production of the Focus Electric in December in Wayne, Michigan, on the same assembly line as the gasoline-powered Focus, a move the automaker said gave it the flexibility to adjust to electric vehicle demand.
“It’s very difficult to get a read on what consumers’ adoption will be,” Felice said. “We just know it’s going to grow. We just don’t know how quickly.”
The Focus Electric is expected to be available in 19 U.S. markets by the end of 2012. The five-door hatchback starts at $39,200, excluding taxes and other fees. In some markets, it is eligible for a $7,500 federal tax credit.
THE CAMPAIGN THAT ‘CHANGED FORD’
Sixty-one million unique visitors come to Yahoo each month to watch videos, Ford said on Tuesday, citing comScore data. Viewers of the “Plugged In” reality show will be able to post comments on the videos. The clues for the scavenger hunt will appear on the car’s touch-screen entertainment and navigation system known as MyFord Touch. Each team is vying for Focus Electric cars of their own.
Ford first used social media on a wide scale to promote the Fiesta small car in 2009 in a campaign dubbed the “Fiesta Movement.”
The automaker gave out cars to 100 people and asked them to complete tasks and chronicle their activities on Facebook, Twitter, YouTube and other websites for six months. Two people wrestled alligators in Florida. Others performed charity work, such as delivering meals to people in need. One couple eloped.
Ford spent $5 million on the campaign to promote the model, which was returning to the U.S. market after two decades, in the year before its 2010 launch. After that campaign, 60 percent of Americans who said they would buy a small car within two years said they were familiar with the Fiesta brand.
That kind of recognition would cost $100 million through traditional means, Jim Farley, head of global marketing, said at an investor presentation in November. The results “just totally changed Ford,” Farley said during the presentation. Ford has since launched other social media campaigns, including the Focus Rally for its compact car.
Ford said the reality show was part of its effort to educate American consumers about electrified vehicles. The company said more than half of U.S. consumers do not know the difference between a hybrid and an electric vehicle, even though fuel economy is the top factor influencing purchase decisions.
“I know what it costs to reach consumers to the level of building brand awareness for a product and it’s very expensive,” Felice said on Tuesday.
“In a big automotive launch, with full traditional media, $80 million to $100 million is not an unrealistic number,” he added. But in social media efforts such as the Yahoo reality show, a launch can cost in the “single-digit millions or even less.”
Reporting By Lynn Adler in New York and Deepa Seetharaman in Detroit; editing by Matthew Lewis