Budget Rent A Car System, Inc.

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Budget Rent A Car System, Inc.

6 Sylvan Way
Parsippany, New Jersey 07054
USA
Telephone: (973) 496-3500
Fax: (973) 496-7999
Web site: www.budget.com

UP YOUR BUDGET CAMPAIGN

OVERVIEW

In 2005 Budget Rent A Car System, Inc., a key unit, with Avis, of the Cendant Car Rental Group, made its first foray into advertising on blogs (website digests typically maintained by one person or a small group of people). Blogs often focused on specific topics and thus attracted niche audiences, and they were known for their conversational tone and opinionated content. With a collective readership estimated at more than 30 million in 2005 and with extremely low advertising rates compared to TV, print, and traditional online placements, blogs represented an exciting, if relatively untested, opportunity for marketers. The Budget campaign, called "Up Your Budget," ran in October and November 2005 and represented one of the most notable marketing uses of this new medium to that date.

At the center of "Up Your Budget" was a series of treasure hunts in 16 American cities that took place during the campaign's four-week run. Information about the treasure hunts, each of which offered a cash prize of $10,000, was accessible only at the website www.upyourbudget.com, which took the form of a blog, and contest participants were enlisted in the further creation of the site's content. The event was advertised with flash-animation cartoons placed on 177 of the most popular blogs of the time; those placements cost approximately $20,000 to run, bringing the campaign's total budget to approximately $180,000. This amount was less than the cost of airing a single commercial on a top prime-time TV program. There was no off-line publicity of the event.

The campaign was well received within the realm of blogs (the so-called blogosphere), and www.upyourbudget.com drew more than 100,000 unique visitors over the four weeks that the contests ran. While the Budget campaign was believed to point the way toward the future of blog advertising, Cendant executives acknowledged the difficulty of judging whether a blog campaign was a marketing success or not, given the medium's newness and its dissimilarity to traditional marketing channels. Nevertheless, Budget planned to continue its blog-centered marketing efforts.

HISTORICAL CONTEXT

Founded in 1958 as a car-rental agency targeting value-conscious travelers, Budget Rent A Car expanded rapidly over the next several decades. In the 1980s and 1990s the company changed hands twice, and in 2002 it was acquired by Cendant Corporation, a global group of companies concentrated in the travel and real-estate industries. Cendant also owned the car-rental company Avis, a key component, with Budget, of the Cendant Car Rental Group.

In the 1990s and 2000s the advertising industry found its primary communication models threatened by a convergence of trends that were reshaping consumers' relationships to media outlets. Among the most noticeable of these trends was the increasing importance of the Internet to consumers' business, personal, and social lives. The Internet both upset traditional notions of marketing and offered an abundance of new advertising possibilities. One promising new outlet for online advertising was the blogosphere, the collective world of online blogs. A blog (the word was short for Weblog) was a website typically created by one person or a small group of people as a forum for personal expression or discussion on a particular topic (e.g., U.S. politics, contemporary literature, or celebrity gossip), with frequently updated postings whose content was often derived from and/or linked to other websites. Because bloggers, as those who maintained blogs were called, were subject to few if any institutional restraints, blogs were often characterized by their opinionated and irreverent approach to topics treated more cautiously by the mainstream media.

Blogs' growing influence on American culture was initially felt most keenly in the realm of politics. A 2002 post on the blog Talking Points led the mainstream media to scrutinize racially problematic comments made by Senate Majority Leader Trent Lott at a private party; the scrutiny eventually resulted in Lott's resignation from the leadership post. For the 2004 U.S. presidential election, moreover, organizers of both major American parties blanketed political blogs with campaign advertisements, underscoring the wider marketing potential of the emerging media outlet. The interrelated system of links characteristic of blogs—bloggers typically offered links to their own favorite blogs, so that the most popular blogs could have hundreds of so-called "inbound" links—meant that the medium especially lent itself to viral marketing, or marketing that used social networks to spread messages in a way that recalled the spread of viruses. By the end of 2004 it was clear that blogs, though they were not individually organs of the mainstream media, had certainly arrived in the consciousness of mainstream America: dictionary publisher Merriam-Webster declared "blog" its "Word of the Year" for 2004 (based on the number of times it was looked up in its online database), and a study conducted in November 2004 by the Pew Internet & American Life Project predicted that, by the new year, more than 30 million Americans would be readers of blogs.

TARGET MARKET

"Up Your Budget" attempted to lure a cross-section of the blog-reading populace to www.upyourbudget.com, itself a blog that served as the home base for the 16-city treasure hunt that was the campaign's focal point. Ads directing blog readers to www.upyourbudget.com ran on 177 blogs, including blogs focused on new technology, celebrity gossip, media affairs, and life in specific urban centers. Though individual blogs had their own niche audiences, blogs in general tended to attract young, technology-savvy consumers, and Budget saw a blog-focused advertising campaign as a way of linking itself with attributes that might differentiate it in an industry not typically defined by fierce brand loyalty. "We really wanted to try something new and different for our brand," the Cendant Car Rental Group's executive vice president of marketing, Scott Deaver, explained to New Media Age (an ad-industry magazine focusing on new media). "We had heard about the power of viral marketing and wanted to see if this was a way to cut through the clutter and do something totally new."

The potential to imbue a brand with coolness via a blog-focused advertising campaign, however, did not come without substantial risk. Bloggers and blog readers could be a tough audience for the uninitiated. Not only were the proprietors of blogs themselves relatively uninhibited, but also blogs by definition solicited comments from readers. "It's very easy to mess up because the space is very vocal," Steve Hall of the advertising blog Adrants told New Media Age. "If you don't blog, it's very likely you'll look stupid entering the space without an in-depth knowledge of it. Anyone interested in doing something in the space should work with a blogger." Budget thus enlisted blogger, author, and consultant B.L. Ochman for the campaign. Ochman was responsible for selecting the blogs on which the ads appeared and, along with the Impax Marketing Group of Philadelphia, helping to craft the campaign's overall strategy and content.

COMPETITION

With 30 percent of the market at the top 180 airports in the world, the Hertz Corporation was the leading car-rental company by a wide margin as of 2004. Hertz was more expensive than most other car-rental companies, but it was also perceived as having superior services; during the late twentieth century, accordingly, it was the most popular rental-car brand among corporate travelers. Hertz advertising campaigns in the early 2000s, however, included efforts to appeal to those who traveled on behalf of small businesses and who tended to be more budget-conscious than their corporate counterparts. After becoming a wholly owned subsidiary of Ford Motor Company in 2001, Hertz advertising often promoted Ford cars. An agreement extending this practice through 2010, under the terms of which Ford supplied half of Hertz's advertising budget, was projected to continue even as Ford divested itself of its Hertz holdings in late 2005.

Beginning in 2002 car-rental companies moved increasingly large amounts of money into Internet advertising. This trend was especially evident among Budget's most direct competitors, those companies catering to value-conscious consumers, such as Thrifty car rental, part of the Dollar Thrifty Automotive Group. In 2002 Thrifty directed 25 percent of its total $9.8 million budget to the Internet and increased that percentage substantially in the following year. "The [I]nternet caters at this point to the value shopper and our brands are very well suited to that," Scott Anderson, Dollar Thrifty's senior executive vice president for global marketing and franchising, told Advertising Age. Thrifty's website experienced traffic increases that outpaced those of the other major brands in 2003.

MARKETING STRATEGY

The centerpiece of "Up Your Budget" was a series of treasure hunts held in 16 American cities—4 cities per week over the course of four weeks—between mid-October and mid-November 2005. The prize for individual winners in each city was $10,000, for a total prize package of $160,000. To win the prize contestants logged onto www.upyourbudget.com for daily clues and videos that helped them identify first the individual cities in question and then a location within each city where a yellow sticker had been placed. The first contestant in each city to find the sticker, call a toll-free number printed on it, and provide video or photographic proof of the discovery was the winner. There was also a treasure-hunters' blog linked to the site, where participants could submit their own hints or ideas about the official clues as well as report on their experiences.

In addition to the $160,000 in prizes, Budget spent approximately $20,000 on advertising placed solely on blogs. The advertisements, meant to drive traffic to www.upyourbudget.com, were simple flash-animated cartoons created by one of the world's best-known bloggers, Hugh Macleod, whose own blog was called Gaping Void. The images were of semihuman figures making humorous gestures and faces, and they were paired with copy such as "The Adventure Begins etc. etc." or "Hunt the Treasure … like it was a Wild Animal."

The exceedingly low price of advertising on blogs relative to TV, print, and mainstream online sites—Budget's total spending on the campaign was less than the cost of a 30-second spot on a highly rated prime-time TV show—made them attractive to marketers, but the medium's capacity for effective brand communication was still largely speculative. Among the campaign's more obvious goals of driving sales and building the Budget brand was that of measuring blogs' capacity to rival traditional marketing. "I wanted to promote 'Up Your Budget' only through bloggers, advertise only on blogs and let it accelerate virally from there," B.L. Ochman explained to New Media Age. "I wanted to prove that we could operate entirely without traditional media and still build brand awareness with a campaign that wasn't overly commercial." Budget did not even announce the campaign with an official press release. News of the campaign was first reported by blogs, including Adrants, Boing Boing, and MarketingVox.

One of the defining risks of viral marketing was the relinquishing of control over the brand's message, and this was a new experience for Budget's marketers. Scott Deaver told New Media Age, "To be asked to sit back and let the viral do its job was a complete leap of faith for us." Not only was it impossible to control the specific nature of the messages being spread virally, but because of the uncensored nature of blogs, the brand also risked being linked to controversial content.

HOW MUCH DO THEY CHARGE?

Rates for ad space on blogs varied at the time that "Up Your Budget" ran. In general the rates depended not just on the number of readers a blog attracted but also on the degree to which specific target markets were drawn to particular blogs. For instance, a celebrity-gossip blog might have a daily readership of 200,000 or more but charge weekly prices for ad space of only a few hundred dollars because of the muddied demographics of its broad readership. A more tightly focused and lucrative target group, however, was worth much more to advertisers even if the blog's readership was only 10,000. That said, the most popular of all blogs (as measured by the number of inbound links driving readers from other blogs to their sites) were generally also the most sought-after spaces for advertisers. The technology-focused Boing Boing, for instance, averaged 1.7 million readers monthly as of early 2006 and charged $8,000 a week for premium ad space.

OUTCOME

"Up Your Budget" was well received in the blogosphere, generating hundreds of blog posts and more than 100,000 unique visits (Web visits made by users from different Web addresses, excluding repeat visitors and thereby giving a more accurate sense of audience size) to www.upyourbudget.com over the four weeks of the campaign. The blog pages on which ads for the treasure hunt appeared were viewed 19.9 million times, resulting in approximately 60,000 click-throughs to www.upyourbudget.com; this meant that in the field of blog advertising the campaign was one of the most successful at driving online traffic to an advertised site. Thousands of people signed up to participate in the contest and to create content for the Budget treasure-hunter's blog, an unprecedented feat for a commercial blog to that date. Nevertheless, Deaver expressed ambivalence about the approach in an interview with the New York Times. "[T]he jury's still out … I'd be lying if I said I know what to measure to determine success … the real determination is, what do we learn? Are we smarter when we do it next time?" At the conclusion of "Up Your Budget," Budget announced that it would hold another such contest in 2006.