Thinking Big Takes Audi From Obscure to Awesome

Strategy to Stand Out While Others Scale Back Delivers Big for Brand

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DETROIT ( -- Charlie Hughes drives an Audi. The veteran auto consultant is most closely associated with Mazda and Land Rover but now owns an A4. "It's becoming smart to show up in an Audi, and that was far less true two years ago," he said.

Audi CMO Scott Keough
Audi CMO Scott Keough
Though Audi of America's sales slipped in 2008, they fell far less than those of competitors amid a calamitous year for the auto industry. Audi's brand awareness, brand opinion and buyer consideration are all up substantially in the past two years. During that time, the brand's gains in that all-important last measure outstripped those of BMW, Mercedes and Lexus. And for the first time in 28 years, Audi outsold Volvo in the U.S. last year. In short: Audi might be the hottest auto brand on the market right now.

So how did the carmaker, which CMO Scott Keough admits has historically "been nichey and quirky and only a subset of a subset of a subset knew about us," change its fortunes so fast?

Its strategy, as hammered out by Mr. Keough and President Johan de Nysschen, is to offer a high-quality and -performance product, and make that known via high-profile media buys that the brand can own, as well as creating chatter by spending heavily on marketing as rivals retrench. Simply put, "a brand needs to have buzz," said Mr. Keough.

The buzz is coming thick and fast. For the first time in two decades, Audi returned to the Super Bowl in 2008 and bought in again this year with a spot hyped heavily in advance on its website. To create anticipation for the commercial, created by Venables, Bell & Partners, San Francisco, the company asked consumers to sign up on its site for a sneak peak. It ran a countdown clock on its website to whip up excitement for the unveiling.

Inauguration hype
Then, last month Audi swamped coverage of President Obama's inauguration, reaching some 50 million people in one fell swoop by sponsoring that evening's news broadcasts on ABC, CBS and NBC and advertising against numerous streamed videos of the swearing-in online. Moreover, the marketer's messaging tied in seamlessly with the tenor of the day and the mood of the country: Audi flagged its ads "Progress moves forward Jan. 21," dovetailing with its marketing theme, "Progress is beautiful."

Next up are two spots in another celebrated big-event venue that draws high ratings: ABC's Academy Awards broadcast. Audi replaces General Motors Corp., which veered off the red carpet for cost reasons. Audi will also sponsor the NCAA basketball tournament on CBS; a documentary about its LeMans teams on ESPN March 20; and return to Sunday Night Football in the fourth quarter. A couple of weeks ago Audi extended its official sponsorship of the U.S. Ski Team for a second year, and its A4 driving game, the first available for iPods, tallied 2.5 million downloads since September.

"We want to send the message that this is a brand that's moving forward and is active," Mr. Keogh said. "Why would we go backwards now when the industry is generally locking the brakes and cutting spending?" He said the brand will spend 15% more on marketing this year than 2008, including events, online and media.

Audi spent nearly $59 million in U.S. measured media in the first three quarters of 2008 vs. just under $15 million in the same period of the prior year, according to TNS Media Intelligence. Audi, said Paul Venables, founder and co-creative director of Audi's creative shop, "has kept its foot on the pedal while everyone else is pulling back."

The acceleration has paid off, considering that five years ago Americans didn't know what Audi stood for. "They were invisible," said Art Spinella, president of consultancy CNW Marketing Research. "Audi didn't know who they were and if they did, they didn't know how to tell people."

Improved perceptions
They do now. CNW's consumer surveys reveal Americans today perceive Audi as a brand of quality and performance, and more females are considering buying the brand. Mr. Spinella said Audi's advertising is now broader reaching and not limited, as in the past, to buys in high-end, niche magazines.

From the second quarter of 2006 through the third quarter of 2008, Audi's brand awareness increased from 62% to 71%, said Mr. Keogh, citing data from GfK Automotive. In the same period, brand opinion rose by from 65% to 78% and brand consideration jumped from 35% to 52%. While its major competitors, BMW, Mercedes-Benz and Lexus, have higher scores, Audi made the biggest gains in the period, with Lexus even showing a 1% slip in consideration to 68%.

Audi has been building buzz over the past year or so since its first Super Bowl appearance, said Wes Brown, VP of consultant Iceology, who is now driving his second Audi in a row. "You can be this aggressive when you have the product to back you up."

Audi sold 87,760 new cars and SUVs in the U.S. last year, down from its record peak the prior year of 93,506 units, but in a disastrous year like 2008, Audi's single-digit slippage of 6.1% is considered admirable and the brand, for the first time in 28 years, outsold Volvo here.

Mr. Hughes said Audi has good reason to be confident due to its steady flow and improvements in products, styling, power-trains, consumer driving events and dealer body improvements, noting the brand is smart to push into high-profile mediums today. "In a world of bad news and fear, confidence is contagious."

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