Regulator-initiated digital marketing campaigns aimed at urging consumers to comply with automobile recall requests can improve compliance, saving money and possibly even lives, according to a Penn State Smeal College of Business-led research team.
In their study, “Regulating Product Recall Compliance in the Digital Age: Evidence from the ‘Safe Cars Save Lives’ Campaign,” the team examined the “Safe Cars Save Lives” digital marketing campaign (DMC) launched in 2016 by the National Highway Traffic Safety Administration (NHTSA). The DMC sought to increase consumer awareness about automobile recalls by providing information to vehicle owners through both paid search and online display advertisements. On average, the initiative increased the number of vehicles fixed per non-airbag-related recall by 20,712 compared to what was expected without the campaign. Its effect was even greater for airbag inflator-related recalls, a key finding given the scope of the Takata airbag inflator debacle that has dominated headlines in recent years, according to the researchers.
Increasing the number of repaired vehicles has more than just an economic effect, said Sotires Pagiavlas, assistant professor of marketing in the Smeal College of Business, who was the lead author on the paper.
“Prior research has found that for every percentage point increase in the rate at which recalled vehicles are repaired, the number of vehicle accidents in the next three years decreases by .46%,” said Pagiavlas. “With our findings examining how the NHTSA’s digital marketing campaign improved consumer recall compliance, we can therefore expect that the significant increase in vehicle repairs as a result of the initiative was also likely tied to fewer accidents and associated deaths.”
The impact of “Safe Cars Save Lives” is magnified when one considers that there are about 900 vehicle recalls per year, according to the researchers. In 2020 alone, there were 786 automotive recalls, affecting close to 32 million vehicles.
NHTSA launched its campaign in January of 2016 to improve low consumer recall completion rates in the wake of mounting challenges. The “Safe Cars Save Lives” campaign was a nationwide digital marketing initiative that sought to push consumers to use the NHTSA’s recall lookup webpage, encourage them to check for open recalls and then fix their defective vehicles quickly.
“Safe Cars Save Lives” was designed like other digital ad campaigns, which use a mixture of methods, said Pagiavlas. In this campaign, the officials purchased automobile recall-related keywords so that people who used search engines to look for information online could be presented with a sponsored link at the top of their search results, leading them to the NHTSA’s website.
“When people searched, for example, “Is my vehicle recalled?” they were likely to see an NHTSA ad at the very top of their search results,” said Pagiavlas. “They could then click on that ad and go directly to the NHTSA’s recall lookup webpage. With their car’s vehicle identification number in hand, they could search to see if their vehicle was recalled and what they needed to do to get it fixed.”
Pagiavlas added that the NHTSA officials also purchased online display advertisements on social media sites, such as Facebook, to also increase consumer awareness of recalls.
More than the minimum
According to the researchers, who report their findings in a paper recently accepted at the Journal of Marketing, automobile manufacturers are required to notify consumers about recalls for their vehicles, but the companies’ efforts often meet only what the law requires and fall short of initiatives like “Safe Cars Save Lives.” Manufacturers may fear the impact of a recall on their stock prices or the perception of their brands in the media.
However, the researchers found that although car manufacturers may try to avoid bringing attention to recalls, media coverage of recalls in the popular press may work with digital marketing campaigns to increase consumer recall compliance.
“We found that media coverage contributed to improving safety outcomes by increasing the effectiveness of the DMC,” said Pagiavlas. “In other words, the digital marketing campaign was more impactful for recall campaigns that received greater media coverage, suggesting that these two media formats can work synergistically to improve consumer recall compliance.”
This study, then, demonstrates other options for safety officials who want to boost consumer awareness. The researchers also found that “Safe Cars Save Lives” was more effective for older vehicles, a class of products with historically low recall completion rates. Increasing recall compliance among owners of older vehicles has been a longstanding challenge for the NHTSA, one that the DMC was able to tackle.
“The evidence of the study could give agencies, such as the NHTSA, leverage to ask Congress for more money in their annual budgets for digital initiatives that can make a huge impact in a cost-effective manner,” said Pagliavlas. “For agencies tasked with regulating industries with frequently recalled products, the impact of digital marketing campaigns could be substantial in preventing accidents and loss of life.”
Pagiavlas suggests that the current research could be used as a springboard for work investigating the impact of digital marketing campaigns in other contexts.
“Think about children’s toys, dressers, or swimming pools, for example, that have some issue that needs to be remedied,” said Pagiavlas. “Each of these are industries in which consumer compliance has often been quite low, leading directly to consumer injuries and deaths. Our study is the first, to our knowledge, that shows that a regulator-initiated digital marketing campaign can take matters into its own hands and receive a positive response from consumers.”
To conduct the study, the researchers gathered data from several sources, including the NHTSA, LexisNexis, and ad$pender.
Pagiavlas’ co-authors were Kartik Kalaignanam, Moore Fellow and Professor of Marketing; Manpreet Gill, assistant Professor of Marketing and Paul D. Bliese, Jeff B. Bates Professor of Management, all at the Darla Moore School of Business at the University of South Carolina.