25% Expedia ad-to-sales percentage
Entry-level luxury cars sounds like an oxymoron. In fact, new, smaller luxury sedans priced below $30,000 such as the Mercedes-Benz CLA-Class are one of the fastest-growing segments of business. Audi of America breaks a new campaign today starring funnyman Ricky Gervais to tout its new entry into the segment: the 2015 Audi A3 sedan, which goes on sale nationwide April 3 at a starting price of $29,900.
The highlight of the new campaign is a 60-second spot called "Dues" starring Mr. Gervais, the British comedian who created "The Office" before moving on to feature films and hilariously taking down Hollywood's elite as host of the Golden Globes awards show.
In the spot from Venables Bell & Partners, San Francisco, we see Mr. Gervais, U.S. gold medal winning boxer Claressa Shields, celebrity chef David Chang, comedian Kristen Schaal and other iconoclasts reciting lines from Queen's hit song, "We Are the Champions."
The message: Each of these "uncompromised" trailblazers persevered until they became successful while refusing to settle, or cut corners. Venables' new campaign follows the "stay uncompromised" theme the shop introduced for the A3 with its "Doberhuahua" spot on Super Bowl XLVIII. That spot was meant to show the perils of compromising.
So why pick Mr. Gervais, who was criticized for daring to poke fun at Hollywood while hosting the Globes?
"He has a point of view. And he sticks to it," answered Loren Angelo, Audi's director of marketing. "That's clearly what Audi does. We are provocative. We have an opinion. ... He was a natural alignment for this campaign."
To complement the traditional ad campaign, each of the individuals featured in "Dues" will be profiled in "Uncompromised" digital portraits on Audi's YouTube channel.
Audi's A3 campaign will air heavily during Turner Sports' coverage of the NCAA "March Madness" college basketball tournament. The luxury brand is also buying time on the spring season finales of TV series such as "The Walking Dead." It will also advertise the A3 during the NBA Playoffs and on ESPN.
Audi's "uncompromised" ad theme has two goals. First, to show wavering customers they're not compromising when they buy an entry level A3 instead of a more expensive Audi. Second, to communicate the luxury automaker itself did not compromise when designing and building the A3.
Said Mr. Angelo: "This car is going into a segment with other vehicles at a $29,900 price point. Usually, a lot of manufacturers make a lot cost-cutting measures to deliver a product there. That simply wasn't the case with the A3. It's an Audi through and through."
The target market for cars such as the A3 and the CLA "Baby Benz" from competitor Mercedes are first-time luxury buyers, said Mr. Angelo. They're typically 30- to 40-years-old in dual income households with no kids. They make $75,000 to $100,000 annually. Audi's typical customers, on the other hand, are generally in their mid-40's and making over $150,000 a year.
On the other hand, European luxury nameplates are salivating over the prospect of luring new customers who previously bought Chevrolet, Ford, Honda or Toyota. Audi president Scott Keogh told CNBC he expects sales in the entry-level luxury segment to grow 400% by 2020.
Mr. Angelo said he expects the A3 to conquest owners from Honda and Toyota as well customers from other luxury competitors such as Mercedes, BMW and Lexus.
"We think there's a lot of people who have been in volume brands who will now consider a vehicle at this price point," Mr. Angelo said.
Mercedes was the first luxury automaker to dive under the $30,000 barrier with its hugely successful launch of CLA last fall. The $29,900 price-tag seems to be the sweet spot to lure middle-class car owners who previously drove a Honda Accord or Toyota Avalon, say automotive experts.
"When you think luxury, you think expensive. But easy and cheap credit has made this segment relatively affordable for people who may have previously bought a mainstream sedan," said Jessica Caldwell, an analyst with Edmunds.com. "Now,they can start to get into this entry luxury segment. The car may be smaller -- but you get a more prestigious nameplate. Which makes it worthwhile for a lot of consumers."
Audi's sales were flat in Feburary compared to 3% gains by Mercedes and BMW, according to the Automotive News Data Center.