Avis

An upstart gains initial traction by exploiting an underserved niche and, years later, nearly unseats the incumbent through a revolutionary ad campaign.   It’s a zigzag tale with an ironic twist at the end, so fasten your seat belts.

Warren Avis had a long tough road ahead of him when he started his car rental company in Ypsilanti, MI in 1946.   He was going up against a rival with a nearly three decade head start in the market.   Hertz’s first fleet, in Chicago in 1918, was comprised of a dozen Model T’s. By the mid-40s, it numbered over 2,000, most located in downtown city areas.

A former Air Force officer whose day job had taken him to air fields foreign and domestic for many years, Avis recognized the lack of rental car options at airports. He also understood that planes would rapidly supplant trains as the go-to means of long distance transportation for most Americans, in particular business travelers on in-and-out trips to major cities.   So he put his company where the wings were.

While Hertz continued to focus on downtown locations, Avis moved aggressively to open offices or to license use of the Avis name in airports across the country. Detroit and Miami were first. New York, Chicago, Dallas, Washington, D.C, Los Angeles, and Houston soon followed. He had information about Avis placed in the ticket envelopes of American Airlines and Eastern Airlines passengers. By 1949, a mere three years after starting, Avis had a substantial lead in the airport niche and was a clear second nationwide to Hertz in overall offices.

Realizing their error, Hertz struck back.   By ’52, they were in 120 airports. By ’55, they had 1,000 offices overall (company-owned or licensed) to Avis’s 850, generating almost triple the revenue of the challenger.   By the early ’60s, Hertz had flipped the script entirely, enjoying a 61-29% market share advantage.

Fast forward to 1962. Despite an enormous expansion of its fleet, Avis was hemorrhaging money and had not been profitable in over a decade.   Stuck in second place, the management (Warren Avis had left as CEO by this point) turned to the stupendously creative folks at the Doyle Dane Bernbach agency to re-engineer their image. They needed a lifeline.   They got a tag line.   The Mad Men at DDBO crafted an ad campaign with the slogan: “When you’re only No. 2, you try harder. Or else.”

Cue the inspirational horns and the revving of engines as the underdog punches low into the gap while the leader banks high. The ads had immediate resonance, deploying a refreshing humility where consumers were used to seeing proud pronouncements of superiority. This, not incidentally, in the early years of a decade that would become famous for its challenges to authority.

The self-deprecating wit continued, killing Hertz softly. “Avis can’t afford not to be nice,” a smiling woman in a stewardess-like cap informed us in a print ad from the mid-60s, “When you’re not the biggest in rent a cars, you have to try harder. We do. We’re only No. 2.” Over the next three years, the losses at Avis were reversed and the market share gap with Hertz closed to 13 points.

Hertz print ad campaign circa 1966

Hertz ignored the challenges for years before answering (the tardy but forceful response seems to be a mainstay in the corporate playbook). The first ads in their 1966 campaign boasted: “For years, Avis has been telling you Hertz is No. 1. Now we’re going to tell you why.” That campaign and several that followed succeeded in stopping the slide.   Hertz had lost precious ground, indeed had almost been overtaken, but their lead was preserved, and would remain intact in the decades to follow.

 Where Are They Now?

Since the ’60s, both Avis and Hertz have gone through a variety of ownership structures, too numerous to mention and not terribly interesting. From the standpoint of the typical car renter, which is to say standing in line at a rental booth, it’s worth knowing that Avis is now corporate partners with Budget. Hertz with Dollar-Thrifty.

And both are getting their crankcases cleaned by Enterprise, which took the top spot over a decade ago in all the metrics that matter – locations, fleet, revenue – even before acquiring National and Alamo in 2007.   Wait , how did the “We’ll pick you up” guys ascend to the top spot? We all thought they were the cute younger brother who insisted on just playing nice.   Ironic twist alert! Enterprise decided to leave the highly competitive airport rental market to the other guys and focus on the local market with many downtown locations serving people with cars in the shop, or who do not own cars at all. With a continuing downturn in air travel (including steep drops after 9/11) as well as increased movements toward urban living, that decision proved a masterstroke.

 Afterthoughts

The enduring message is about the power of a skillfully crafted and well-executed advertising strategy to upend the established order even in well-established industries. That’s a commonplace today, of course (see: million-dollar slots on the Super Bowl) but it wasn’t so then.

The other takeaway is that, in advertising, a judo-like misdirection of energy can sometimes be as effective as a wood-splintering karate chop. The “We Try Harder” campaign was among the first to undermine the bigger-is-better ethos that predominated in the years after World War II and to use an underdog status to game-changing effect.   The campaign is ranked 10th on Advertising Age’s Top 100 campaigns of the 20th century.

It may or may not be of great significance that a lead copywriter on the Avis account at DDBO was a woman named Paula Green.   In a corporate culture where the Mad Men were famously shameless in exerting dominion, it comes as no surprise, perhaps, that the most slyly self-effacing tag line in history would come from a Mad Woman.