If one spent time listening to Apple’s latest product to launch, dubbed iTunes Radio by the tech giant, then one has probably noticed that the majority of the advertisements between songs are Nissan ads.
The reason is a brand-building partnership between the two companies that has made Nissan the exclusive automotive partner and only car manufacturer able to market their products on Apple’s “Next Big Thing” through the remainder of 2013.
Kevin Gwinner, professor of marketing, said the exclusivity could be a big boost in profit for any company working with a company as big as Apple. The partnership sets potential customers up for a phenomenon known as brand transfer.
“You won’t see Toyota, Ford or any other brand there,” Gwinner said. “If I think of Apple as cutting-edge technology, then that image can translate to their sponsors, which is a benefit to Nissan.”
According to an article by Daniel Dilger from Sept. 4, Nissan, along with companies like McDonald’s, Pepsi and Proctor and Gamble, have paid upwards of $10 million a piece to Apple’s advertising platform iAd, to become the exclusive partners of their respective industries.
Apple’s large following of loyal customers seems to be enough for these giants, in their own industry, to take the high-priced plunge.
“We see iTunes Radio as an integral part of our new vehicle launches and ‘big moments,’ riding the wave of interest and usage of this exciting new service to maximize exposure of Nissan’s new models,” said Jon Brancheau, vice president of marketing, Nissan North America, Inc., in a Sept. 23 Nissan press release. “We’re also adding iAd on iTunes Radio as a critical platform in support of ongoing campaigns, such as our college football and Heisman Trophy Tour initiatives. It’s a great way for Nissan to reach the right audiences in the right markets.”
While Nissan might not have the clout that some of these other brands hold, the automaker has become a major player in the auto industry as record sales in October 2013 support. The company, which also owns the luxury brand Infinity, sold 91,018 vehicles in October, an increase of 14.2 percent from a year ago.
No Nissan vehicle saw a better sales increase than the Leaf, an all-electric and tech loaded compact, which had a 26.8 percent increase on its own. It’s no surprise that the Leaf, along with Nissan’s 2014 Versa Note and the 2014 Rogue, have high technology and miles per gallon and each feature iTunes Radio.
Tina Ratcliff, senior in marketing and entrepreneurship, said Nissan is definitely tapping into the environmentally conscious stereotype of Apple consumers, but that is just the tip of the iceberg.
“That’s definitely going to play into it,” Ratcliff said. “There are a lot of different reasons that people are targeting Apple, but the number one [thing] is because it’s that market. Apple appeals to a certain type of person.”
It’s a market that consists primarily of potential customers who are going to be at their highest purchasing power in the coming years.
“These are people that can afford these products,” Ratcliff said. “People who can afford an iPhone [and] an iPad can probably afford a Nissan.”
It was originally reported incorrectly that Nissan would be the exclusive automaker to have iTunes Radio. Though that rumor was false, if something that is this exclusive does occur, Gwinner said it could be huge for Nissan.
“I think Nissan would be paying iTunes in that case,” Gwinner said. “Any sort of new feature like this is big. Believe it or not, cupholders didn’t used to exist in cars. So when Honda and Toyota [started] introducing their cars to the U.S., they put cupholders in, and people would come in and say ‘I want to see that car with the cupholders.’”
If cupholders can do it, being the only cars with iTunes Radio installed provides interest.
Evan Yule, senior in advertising, said he still isn’t buying into the hype.
“I know they’re trying to build a market of future car buyers, but if I’m not in the market for cars or insurance, it’s just kind of like nothing noise,” Yule said.