$70 million account: Audi's shop talks on, off, on again?

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Audi of America's recent agency flirtation has more on-again, off-again plot twists than a romance novel.

After word leaked earlier this month that the carmaker was meeting with several shops, Audi hastily moved to quash talk of a review. It maintained that meetings were arranged innocently by Michael Lembke, marketing director at Audi, but that they'd never taken place and that the $70 million account was staying put at Havas' McKinney & Silver, Raleigh, N.C.

People familiar with the situation, however, insisted Audi did see presentations from three agencies and more were on the way when the automaker changed its plans Jan. 2. One person said McKinney had already pitched, along with independent Wieden & Kennedy, Portland, Ore., and Publicis Groupe-backed Bartle Bogle Hegarty, New York.

no comment

McKinney won the account-its biggest-in 1993. It referred calls to Audi, which stressed its satisfaction with the agency but declined to comment on whether McKinney's contract contained a 90-day notification clause. The other two shops could not be reached for comment.

Also believed to be circling the account was Omnicom Group, either through its DDB Worldwide, New York, or GSD&M, Austin, Texas, unit. A spokeswoman for DDB denied that. GSD&M said it had not been in talks with Audi and had not been asked to meet with the company.

Len Hunt, VP in charge of Audi of America, maintained there was and is no Audi pitch and the meetings were canceled "the minute it started getting out of hand."

Audi's U.S. sales have been strong-it posted its fourth straight year of annual records sales in 2003, and Mr. Hunt expects a dramatic sales spurt when the smaller A3 car is introduced next year and Audi's first SUV the year after. But following a string of annual skyrocketing profits, parent Volkswagen AG's earnings-which include Audi-plunged this year. In November its third-quarter global profits plummeted by 51% vs. a year ago to $254 million in the third quarter. "Our German colleagues have been looking for efficiencies worldwide," said Mary Ellen Wilson, national advertising manager at Audi of America.

In an interview, Mr. Lembke confirmed he had arranged meetings with at least three agencies during last week's North American International Auto Show in Detroit, but did not take them. He said the purpose was educational. "I wanted to learn more about the advertising world," said the German-born engineer who spent most of his 10-plus years at Germany's Audi AG in product planning.

He said he decided to cancel the meetings at 3 p.m., Friday, Jan. 2, which was part of a long holiday weekend for most agencies and that he was able to reach at least two agencies.

Mr. Lembke declined to name them, but said two of the three shops that were invited already work with Audi and its parent, Volkswagen AG. BBH, London, handles Audi's U.K. account. Wieden's Amsterdam office won a review in 1999 for Audi's pan-European A2 launch but was dropped in 2000. DDB has handled VW for decades, has the automaker in 26 countries outside the U.S. and has Audi in nine countries outside the U.S.

In addition to DDB, Omnicom shops without a car account domestically include Arnell Group, whose contract with Chrysler Group expired in December; GSD&M, which lost Land Rover in a consolidation; and Martin/Williams, Minneapolis, which withdrew as one of five semifinalists in Volkswagen of America's $90 million review in 1995.

`a short brief'

Mr. Lembke said Michael Trautmann, worldwide marketing director at Audi helped him select the agencies. "I gave them a short brief," said Mr. Lemke, which he said merely asked for a better understanding from the shops about advertising in the U.S.

Audi also denied it had a consultant. But it is said by an executive close to the process to be working with Alex Wipperfurth, partner at Plan B, San Francisco, a strategic and creative consultant with a pop-culture orientation and a roster that includes Amazon and Polaroid. Mr. Wipperfurth, however, denied working for Audi.

Mr. Lemke said he "underestimated the magnitude of what it means to speak to other agencies" in the U.S. but didn't categorically rule out a review. "I may still consider talking to agencies down the road, but not in the near future."

contributing: claire atkinson

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