Volkswagen to Rely Solely on IPhone App for GTI Launch

Automaker Says Move is Cost-Efficient Way to Reach Target Demo

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NEW YORK (AdAge.com) -- Volkswagen of America is launching the newest-generation GTI exclusively on an iPhone app, a cost-efficient approach the automaker said is a first for the industry.

VW's Real Racing GTI game for the iPhone and iPod Touch in the App Store includes a virtual showroom.
VW's Real Racing GTI game for the iPhone and iPod Touch in the App Store includes a virtual showroom.
How cost efficient? When the marketer introduced the GTI in 2006, it spent $60 million on a big-budget blitz with lots of network TV. By comparison, an executive familiar with the matter estimates the annual budget for mobile AOR services is $500,000. And while an iPhone-only strategy may seem limiting, consider this: In September, Apple reported there are more than 50 million iPhone and iPod touch customers worldwide. By comparison, CBS' "NCIS," the most-watched show for week ending Oct. 18, reached 21 million viewers and commands an average price of $130,000 for a single 30-second spot.

The automaker's Real Racing GTI game for the iPhone and iPod Touch in the App Store, unveiled at a press event last night in Manhattan, includes a motion-controlled car-racing game play like arcade or console counterparts, as well as a virtual showroom. The brand conceived the mobile strategy, which also includes a six-car giveaway for game players, with independent digital agency AKQA.

Volkswagen licensed the game from Australian developer Firemint, which built a pared-down version with fewer race tracks using only GTI's, the high-performance variation of VW's Golf brand.

Not only does choosing a mobile platform over a customary 30-second spot reduce marketing cost, but licensing an existing game also means savings. "It's a clever idea," said mobile-marketing consultant Raven Zachary, president of Small Society and founder of iPhoneDevCamp. "Licensing game technology saves VW considerable development cost and time to delivery. And the cost of six cars is not bad considering the cost of doing a print campaign or TV campaign."

Cost a focus of VW review
Cost appears to be a major factor in Volkswagen's review for creative agency of record, according to executives familiar with the matter. Goodby, Silverstein & Partners, San Francisco and Deutsch, Los Angeles are still in the running, after DDB and Wieden & Kennedy were eliminated yesterday.

Of course, there is a real danger the automaker will miss many prospects using only one narrowly targeted marketing tool. But Tim Ellis, Volkwagen of America's VP-marketing, maintains it is a highly targeted strategy to directly reach the GTI customer, a tech-savvy, social-media activist who spends time on mobile devices, most often iPhones. "It's a homerun in terms of the demo overlap," said Nihal Mehta, CEO of local-search and networking app Buzzd.

As for driving that demographic to discover and download the app, Volkswagen is banking on PR, viral pass-along and some paid search for consumers looking for iPhone apps and information on the GTI.

Coming at a time when advertisers and agencies are trying to figure out how to get their apps to get noticed -- and downloaded -- amid the more than 65,000 in the App Store, the question arises: Will viral be enough for the GTI app? The game includes built-in functionality for players to send messages via Twitter and upload game play-videos to YouTube. Digital experts such as Mr. Nihal, who founded text-messaging company Ipsh and sold it to Omnicom Group in 2005, thinks these vehicles will prove more effective than paid media.

"Viral tactics work because media buys aren't that compelling anymore," he said. "You can get clicks, but even if an app is free, people don't want to download it. They really have to be invested or told by a friend." He especially thinks the competition and incentive to play and beat other players will work to make the app popular.

Small Society's Mr. Zachary agreed, especially since the game has incentive beyond entertainment: a chance to win a new car. For consumers, more game play means more chances to win one of the six limited-edition 2010 GTI's that the Herndon, Virginia-based automaker is giving away as part of the launch. Beyond the competition, the fact that the mobile-only car launch is a first is a big draw for press, too.

'PR value'
"It's not a gamble in this case," he said. "VW is the first to do this and that's PR value. If this had been the third car giveaway through an app, maybe not. Because this is novel, [VW is] going to generate considerably more press and that will drive downloads."

Press hits aside, pitting app user against app user in competition will also translate to downloads, said Mr. Mehta, citing the popular mobile social networking service FourSquare, where users compete to be the mayor of local bars and restaurants, as a prime example. "I don't know if a press event is going to do anything, but building in those viral elements of inviting friends having multiplayer games is a good long-term strategy. People like to compete," Mr. Mehta said.

VW's launch push for the GTI in 2006 from Crispin, Porter & Bogusky, Miami, featured a dark, gremlin-like character called "Fast" who in TV spots and online urged male GTI drivers to drive faster. The other work, themed "Unpimp Mien Auto," played on VW's heritage with "Helga," a sexy, labcoat-wearing engineer with a German accent aimed at conveying to tuners of Asian cars that the GTI has built-in Deutschland engineering. Online versions with Helga and her sidekick, Wolfgang, were wildly popular and won Crispin Porter the top cyber award at Cannes that year.

But there were insiders at VW who were concerned that the company was spending too heavily on the niche GTI model while ignoring the best-selling Jetta. Auto pundits criticized VW for having too many different messages for different models instead of an umbrella approach.

VW sold 5,558 GTI's in the first nine months of the year, 57% fewer than the same period a year ago, while its Jetta sales jumped by 7% to 81,161 cars, according to Automotive News.

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