Automotive News - October 27, 2008 - (Page 22) 22 • OCTOBER 27, 2008 Keogh: Audi belongs with top luxury brands cott Keogh, chief marketing officer of Audi of America Inc., aims to elevate the luxury brand to parity in the United States with BMW, Mercedes-Benz and Lexus. Under Keogh, who joined Audi in mid-2006, the company hasn’t been afraid to poke fun at the competition in its advertising. This year, Audi earned good reviews and broad consumer recognition for a TV spot it introduced during the Super Bowl, a spoof of The Godfather that promoted the new R8 sports car. In 2009, Audi plans to launch a diesel and the smaller Q5 crossover. Meanwhile, Keogh, 37, is overseeing Audi’s marketing of the redesigned A4, a competitor to the BMW 3 series and Mercedes-Benz C class. The former executive of Mercedes-Benz USA discussed Audi’s marketing strategy with Staff Reporter Diana T. Kurylko. S STRATEGY 2009: SCOTT KEOGH Why did you choose a living room as the setting for the “Progress is Beautiful” campaign for the A4? We have all seen the importance of design — style and furniture and these things. If you look at the luxury segment, design has a big impact. We wanted to make the transfer to the interior of the car. Audi has been recognized for having the best interiors in the business — the materials, the thoughtfulness, the technology. We thought this was a great way to make these two things line up. We also thought it important to show many little stories. People in the know picked up on them. For example, we have a (Bang & Olufsen) sound system in our cars, and we have that in the living room. We had a piece of modern lighting in the hallway that is exactly like the LED systems in our cars. All of the leather and wood matched the leather and wood in our cars. What has been the response to the campaign? The response has been irrefutably fantastic. We held 20 to 25 dealer advertising group meetings. We have Audi Talk, which lets consumers send e-mails directly to the company, and we respond. We put a campaign out there, and within 15 minutes you could track the e-mails and the phone calls coming in. Third is the Web site traffic at audiusa.com. We have seen traffic 120 percent higher since the Olympics. The final piece of the puzzle is the longer-term tracking studies. But the initial reaction has been huge. In this second spot in this campaign, you show the BMW 3 series and Mercedes C class and say they’re slower and less fuel-efficient than the A4. Has that had an impact? A lot of people make the mistake that this campaign is just about creative bravado and that we are trying to make some noise. This is based on strategy. When we spoke to luxury consumers and focus groups, they told us two things. One, they need a clear understanding of where Audi belongs. That is why we needed to show this direct connection to Lexus, BMW and Mercedes. This is Tier 1 How has your driving tour developed? We kicked off the Audi Driving Experience last year. It has two phases. We are permanently on the track at Infineon Raceway in Sonoma (Calif.). Second, we move around the country. We were in nine markets with the A4 tour. We are close to 10,000 test drives. The tour kicked off in July and wraps up at the end of October. luxury, and this is where Audi belongs. Second, American consumers like a challenge. If you have the goods, go out and state it. That is what this campaign has done. The car is bigger, it is more fuel-efficient, and it is quicker. If you look at our product substance and technology, the upgrading of our franchises, our racing program and our history — we will celebrate our 100th birthday next year — there is no reason to apologize. What is different about the way your ad agency, Venables Bell & Partners, is approaching Audi’s marketing and advertising? Audi had to stop being the great unknown and be the great known. We have always been liked by automotive enthusiasts, collectors and people in the know. Clearly (Venables Bell’s work) has been a lot more popular and progressive rather than quirky and niche-y. The luxury market is driven off public prestige. People buy a luxury product because they get confirmation from others. When you drive a car and see eight other people have your product, you say, “I made the right choice.” We needed to move out as the brand with much more public acceptance and popularity. That’s what Venables and Audi of America have been working on. Why does your “Truth in Engineering” tag line work? Because it fits our product. There is not a lot of bombast or noise. Historically, we do LeMans to have pretty marketing campaigns. We go to win and to prove our technology. What we put into the race car, we eventually put into our engines. It gets delivered. What was the strategy behind your Super Bowl commercial? It was audacious, and it got a lot of attention. We wanted to let the market know: We are here, we are going to be taken seriously, and we are joining this club. The R8 was such a dramatic, game-change car for us. We wanted America at one time — and half of America was watching — to say: “Bam! The R8 is here.” What I did not calculate about being in the Super Bowl is how it motivates the entire enterprise. You get dealers speaking about it. You will see customers drive into the service bay and talk about it. That is what marketing is supposed to do. Was the strategy similar for the A5? We went to the Oscars with the A5. It was very similar thinking with the Olympics and the Super Bowl. We want to be in the medium that America is watching. It was very well-received. We have an 18-day supply on the A5. How will you market the Q7 diesel, especially with diesel fuel prices so high? There is the function and there is the value story. There is a big audience of people who need seven-passenger SUVs. They have activities from towing boats to skiing. They need a vehicle that has a lot of range and a lot of torque. Diesel absolutely delivers that. The value story is that it gets a good residual — three more points in the marketplace. It is 20 to 25 percent more fuel-efficient, so you will be going to the pump less often. When will you launch diesel ads? We look at the first half of next year. We have been marketing diesel through our LeMans racing program — we won for the third time with diesel. We are marketing it below the line all the time, and we will get above the line. Will you do TV? Too soon to tell. I don’t want to show my cards yet. The Q5 crossover is a new segment for Audi. How will you position it at a time when SUVs are not popular? The vehicle is coming in the first quarter of next year. It can be the second-biggest volume after the A4. We see the product as being perfectly timed. It is fuel-efficient, and it is the right size for the market. What is the competition? Certainly you have to look at the BMW X3 and the Lexus RX. Mercedes-Benz has the GLK that comes in January. To a lesser extent, the competition also is the Acura RDS and the Infiniti EX. Audi is increasing its marketing budget when a lot of automakers are cutting back. Are you looking at a substantial boost? We are spending more this year than last year. We have plans and we have momentum. We are up half a point of share this year. We are anticipating volume and share growth next year with the addition of the Q5 as well as the A5 Cabrio and a full year of the A4. Our dealers are investing in facilities. How does the Internet fit into your advertising model? Big franchise opportunities on television are important. People see us and it drives traffic to the Internet. The second platform we are most aggressive on is online. Our online advertising budget is up significantly. We had a massive spike with the Super Bowl, and we are getting more and more traffic.c http://www.audiusa.com
Table of Contents Feed for the Digital Edition of Automotive News - October 27, 2008 Chrysler dealers under GM? States would rule Survey: Worried dealers flee GMAC Va. dealers turn to local credit unions Anxiety over Chrysler: Deal or no deal? Ford, GM execs join panels looking at eco-friendly options Big pickups, SUVs gain share Chrysler will cut 4,300 salaried jobs by year end BMW seeks joint vehicle electronics effort Runkle: Give tiny suppliers a chance VW goal: 80% N.A. content for Tenn. plant April Wortham China's BYD plans U.S. hybrids Lucky Icahn lost Lear Mahindra's U.S. launch to get $60 million ad drive Toyota may renew no-interest loans Hesterberg, Thomson will address congress Desperate industry begs feds for help Hyundai dealers want ads to pitch favorable loans Toyota, GM top global r&d spending After Detroit 3 take back design, supplier sitting pretty Germany's Preh supplies F-150 ventilation part Buehler is Volt supplier Freescale: New infotainment chip Are they too big to fail? A goal for GM: Buy back full control of GMAC Tax credit would move domestic cars GMAC loan bonus is a bad idea Take a good look: Toyota is losing its halo What flexibility is and what it isn't Toshiba joins battery battle Personnel Hyundai slows Ala. output of Sonata, Santa Fe Picture this LaNeve: GM marketing budget faces '09 hit Hyundai counts on luxury, hybrid hopes Keogh: Audi belongs with top luxury brands Dealers Court overturns class-action status in Blue Oval suit 2 major lemon-law lawyers lose right to practice in Md. Auctions offer more online for just-in-time dealers Used-truck prices higher in September Lack of used Minis limits certified program Wood trim maker expects to avoid worst of woes VW: U.S. may get Scirocco after all Ford's new F-150 is built for jobs, not jaunts Think of it as GPS for tools Feds look at China-made valves on Ford tires Shareholder value tumbles in 3rd quarter Shareholder value tumbles in 3rd quarter Ford truck marketing exec: Hybrid pickup 'publicity stunt' Survey: Ford Motor reliability improves Chrysler heir: Get back to basics Farley has bright idea to boost auction action Kerkorian speeds away from autos Names familiar? NADA leadership is a family affair Mitsubishi bucks trend on profits New trade debate in the works? Beware the 'vital' deal Automotive News - October 27, 2008 Automotive News - October 27, 2008 - (Page Intro) Automotive News - October 27, 2008 - (Page Bellyband1) Automotive News - October 27, 2008 - (Page Bellyband2) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 1) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 2) Automotive News - October 27, 2008 - Chrysler will cut 4,300 salaried jobs by year end (Page 3) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 4) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 5) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 6) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 7) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 8) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 9) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 10) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 11) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 12) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 13) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 14) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 15) Automotive News - October 27, 2008 - Hyundai slows Ala. output of Sonata, Santa Fe (Page 16) Automotive News - October 27, 2008 - Picture this (Page 17) Automotive News - October 27, 2008 - Picture this (Page 18) Automotive News - October 27, 2008 - Picture this (Page 19) Automotive News - October 27, 2008 - LaNeve: GM marketing budget faces '09 hit (Page 20) Automotive News - October 27, 2008 - Hyundai counts on luxury, hybrid hopes (Page 21) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 22) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 23) Automotive News - October 27, 2008 - Dealers (Page 24) Automotive News - October 27, 2008 - 2 major lemon-law lawyers lose right to practice in Md. (Page 25) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 26) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 27) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 28) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 29) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 30) Automotive News - October 27, 2008 - VW: U.S. may get Scirocco after all (Page 31) Automotive News - October 27, 2008 - Feds look at China-made valves on Ford tires (Page 32) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 33) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 34) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 35) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 36) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 37) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 38) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 39) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 40)
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