Stephen Berkov Overhauls Brand's U.S. Marketing Strategies

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Who: Stephen Berkov, director of marketing for Audi of America.

Why you need to know him: Mr. Berkov is working to broaden the brand’s reach. One way he plans to do it: branded entertainment.

When Stephen Berkov took the job as Audi of America’s marketing director last fall, the executive had some housecleaning to do.
Stephen Berkov is making branded entertainment a more important part of Audi's marketing strategy.

The 36-year-old was determined to integrate Audi’s communications, ridding the automaker and its agencies of silos. One of his mantras has been to challenge conventional thinking to surprise consumers.

Disbands e-business team

Among his first moves was to disband Audi’s e-business team and reduce spending for online infrastructure, enabling the company to devote more money to spread Audi's message uniformly. “I wanted it integrated because it blurred the brand too much.” Customer relationship management was also consolidated into his 10-person team.

The first vehicle launch he was able to call his own was the new A3 premium compact. He knew A3’s 25- to 34-year-old target is turned off by advertisers “shouting at them, telling them what to buy. They smell artificial messaging and lack of authenticity,” he said.

So Mr. Berkov enlisted branded entertainment to help him reach that audience.

The result: Audi launched two separate online efforts. A viral -- and less-visible -- blitz, dubbed “The Art of the Heist,” sought consumer help in tracking down an A3 allegedly stolen from Audi’s Manhattan showroom in March.

The second effort, a more lifestyle-oriented approach called “What’s Next,” which advertised online and in print ads, tracked the cross-country drives of three aspiring filmmakers in May and June. They blogged their way across America in their A3s. Consumers can vote online at audiusa.com/a3 for their favorite 15-minute film through Aug. 3.

Pinpoint marketing

“I call it acupuncture marketing, or pinpoint marketing,” Mr. Berkov said. “You go narrow and deep.”

Traffic to Audi’s Web site from the two programs reached new heights. The automaker was getting roughly 800,000 monthly visitors during the same months in 2004. But this year, traffic surged to 1.4 million monthly visits. And, 33% of visitors went from A3 pages to also look for a dealer, price leases or configure the car vs. 25% for the A4 and 21% for the A6.

Havas’ McKinney & Silver of Raleigh, N.C., handles Audi's national creative advertising account. Independent Enlighten of Ann Arbor, Mich., is Audi’s interactive agency.

Mr. Berkov said the short-film effort was his brainchild blossoming from Audi’s multiyear sponsorship of the American Film Institute’s annual fall Film Fest. He also takes credit for luring in Apple and Sony’s consumer electronics division as partners in the project, citing their authentic brand personalities that match Audi’s.

His branded entertainment philosophy is that any deal must be a natural fit for Audi and built into the story in a genuine way.

20th Century Fox tie-in

Up next, Audi’s top-of-the-line A8 sedan and A3 get plenty of screen time in 20th Century Fox’s action movie The Transporter 2, due out in September, but the automaker won’t support the film with additional ad spending. Mr. Berkov hopes the movie will help build brand awareness. Propaganda, Los Angeles, handles the automaker’s Hollywood gambits. Last summer Propaganda brokered for Audi prominent placement, in the form of a futuristic concept car, in Fox’s sci-fi flick I, Robot.

Additionally, Audi is working with WPP Group's MediaCom to sponsor TNT's cop show The Closer, and will sponsor Details magazine’s U.S. events to connect with the publication’s so-called Black Card loyal readers.

In the second half of 2005, Mr. Berkov said he has launched the first national ads in two years for the A8 in magazines including Vanity Fair. He is also increasing the number of events Audi does, focusing on major metro markets as he tries to broaden the brand’s reach.

Mr. Berkov has a bi-coastal and international background. Born in Boston, he grew up in Connecticut until his family moved to California in the mid-80s. His UCLA majors in communications and Japanese studies helped land him a media relations job right out of college with Toyota in 1991. He lived in Japan as an auto consultant until Audi hired him in 1999 to head marketing there. He worked in marketing at Audi’s German headquarters from last March until his move to the U.S.

At Home With Audi

He’s proud of a consumer event he developed in Japan called “At Home With Audi,” a fashion show with designers that also showed off the cars. His team helped reposition the brand in Japan and improve annual vehicle sales from 6,000 to 15,000 units. His boss is still Audi Japan President Johan de Nysschen, who became executive vice president of Audi here last fall.

Parent Volkswagen of America unit spent $23 million in the first quarter and $70 million in measured media behind Audi in 2004, according to TNS Media Intelligence. Mr. Berkov projected 2005 vehicle sales will be flat with last year’s numbers since Audi dropped one model. Last year, Audi sold 77,917 units compared with 86,421 in 2003, according to Automotive News. In the first half of 2005, Audi sold 37,701 vehicles in the U.S., 269 fewer than the same period a year ago.

Lee Newman, group account director at McKinney, praised Mr. Berkov for having an "unbelievable passion about the Audi brand. He articulates it in a way that makes people think differently about it.”

'Never Follow' tagline

Mr. Berkov helped the agency clarify the brand’s “Never Follow” ad tagline, expanding it from merely independent-minded owners to leadership, Mr. Newman said. And, he added, Mr. Berkov also has an "inherent understanding and instinct” about which other brands make great partners for Audi.

Since Mr. Berkov’s arrival, the agency now talks more often to Audi’s other agencies, even before new work is presented.

“Audi has been the best-kept secret among the affluent in the U.S.,” he said. “We plan to really talk to the people who understand the values of the Audi brand.”
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