June 6th, 2000
Update on Small Business: Several Start-Ups Are Wrapping Cars in Advertisements --- Drivers May Get Paid or Free Use of a Vehicle, but a Group Sees `Ad Creep'
By Rodney Ho
Wall Street Journal
Three California start-up companies are racing to turn the average person’s
car into an advertising vehicle.
In two cases, drivers get paid for the privilege. In the other, they get free
use of a car for two years.
The largest company so far, Autowraps Inc. of San Francisco, transforms vehicles
into roving billboards by sheathing them with a digitally printed adhesive vinyl
wrap that is now commonly used on municipal buses.
The wrap, introduced in the early 1990s by Minnesota Mining & Manufacturing
Co., better known as 3M, can be taken off without damage to the car’s paint.
Autowraps pays consumers $100 to $400 a month depending on the extent of the
wrap.
"It helps pay for the gas since prices are exorbitant," says Derran
Cannady, a 38-year-old owner of a San Francisco publishing company who is helping
promote a new line of ice cream for Dreyer’s Grand Ice Cream Inc. via his Volkswagen
Beetle. Strangers stop him at red lights or in parking lots to ask him questions,
sometimes wondering if he has any free ice cream or how they could take part
in Autowraps.
Not everyone is thrilled with this phenomenon. "It’s part of ad creep,"
says Gary Ruskin, head of nonprofit awareness group Commercial Alert. "As
ad budgets go up and clutter increases, ad firms are trying to find any innovative
way to stick ads in front of our noses."
Autowraps advertisers will likely eliminate applicants who don’t drive enough,
live in noncongested areas, or own ugly clunkers. They also need clean driving
records and no felonies, says Autowraps owner Daniel Shifrin, 31. Consumers
are required to sign a one-year contract. People typically need to drive at
least 800 miles a month on certain highways to reach the number of "eyeballs"
that keeps advertisers happy.
As a compliance measure, Mr. Shifrin has employees do odometer checks, but
he is automating the process by installing global positioning systems that track
a car’s movements. Car owners are also responsible for telling Autowraps if
they are taking extended vacations so payments would be suspended for that time.
And if they keep the car in the driveway too often, Autowraps may give them
a call. Drivers say this intrusion is worth it given the cash tradeoff.
"It’s not some secret agency," says Mr. Cannady, the Beetle owner.
He adds that he isn’t required to even say that he likes the product. "Fortunately,
the ice cream’s good," he adds. Mr. Shifrin says consumers generally won’t
have discretion to pick specific advertisers but can object if they have a moral
issue.
Advertisers pay Autowraps $1,000 and $2,000 a month for each vehicle. So far,
Autowraps has 200 vehicles in five cities, mostly in San Francisco and Los Angeles.
Mr. Shifrin says he garnered more than $1 million in advertising revenue after
five months from 15 advertisers, including Yahoo! Inc., online sweepstakes company
LuckySurf.com Inc., and Lowest Premium Insurance Services Inc., which sells
auto insurance on the Internet via lowestpremium.com.
Mr. Shifrin says he was inspired last year by a massive traffic jam in the
Bay area that trapped him for 90 minutes. "I was looking at all these vehicles
and they were boring," he says. "I want to be entertained. Commercial
vehicles have logos on them. Why not somebody’s car?"
Marketers have been putting advertising messages on sides of vehicles for decades.
The most prominent example was Beetleboards of America Inc., which used VW Beetles
from 1972 to 1981. Charles Bird, who now runs a Sarasota, Fla., consulting firm
for start-ups, says he once had as many as 10,000 Beetles with his ads, generating
more than $70 million in revenue over those years. Advertisers included Time
magazine, Clairol hair products and Brown & Williamson cigarettes, he says.
"The Beetle owners were uniquely enthusiastic," he says. "We
paid them just $25 a month, and they often did promotions for us."
Unlike the current wraps, Beetleboards were painted and individual decals placed
around the car. He says he went out of business because Volkswagen stopped making
the Bug in the mid-1970s, and his pool of drivers gradually dwindled. Drivers
using other vehicles proved less cooperative than Bug owners. "They were
upset about their paint jobs when the decals came off," he says. "We
tried to do promotions, and a lot of the drivers were difficult."
MyFreeCar.com, another San Francisco company, has 25 wrapped vehicles on the
road. A similarly named company, FreeCar.com of Los Angeles, is opting to give
selected consumers advertising-laden cars for two years. Leases would be paid
through advertising. (MyFreeCar.com also hopes to offer this option). FreeCar
owner Larry Butler says he plans to get cars wrapped as early as Labor Day.
Adding a surreal touch to this race, Esquire magazine recently published an
April Fool’s article spoofing this concept, calling its company FreeWheelz.
Writer Ted Fishman emphasized the intrusiveness of this idea, asking applicants
for "a stool sample" and noting that "participants who agree
to stage rush-hour rubbernecking delays qualify for air conditioning."
Even with these absurd touches, some of the existing start-ups believed the
story, worried that they had lost "first mover" advantage.
And a few weeks ago, FreeCar’s Mr. Butler purchased the FreeWheelz joke Web
site for $25,000 from Esquire and Mr. Fishman, who split the proceeds. "They
got a lot of hits to their Web site," Mr. Butler reasons. "I have
access to their database and prevented anyone else from buying it."
Adds Mr. Fishman, "Maybe I should have done a business plan instead of
an article."
Currently, the start-ups are trying to take advantage of hungry dot-com advertising
budgets. Lowestpremium.com, for instance, now has 75 cars in California with
its logo on them, on top of 400 regular billboards. "We could have hired
a truck to drive around with our name on it, but we felt people’s cars were
more real," says Ismael Sapoval, vice president of marketing for lowestpremium,
which is based in Columbus, Ohio.
Mr. Bird, the Beetleboards man, says he has no plans to get back into the business.
"I’m going to leave it to the young guys," he says. His advice to
the start-ups: get evidence as early as possible to ad agencies that the medium
works as a long-term advertising option, not just a one-shot promotional gimmick.
Mr. Bird says he commissioned research studies in the 1970s showing that his
Bugs were more effective ad mediums than static billboards. "A lot of companies
may do it once," he says. "But if you want to sustain it year in and
year out, you’ll have to prove its worth."
Comments
- Posted by Deborah Savage on February 8th, 2006
I use to work for Charlie Bird at Beetleboards. You did not post the name of his business in Sarasota