John Abbott can look back at his time as head of Volkswagen’s
marketing and feel thoroughly vindicated. When he first took the job in
1993, a Campaign profile called him ’astute but not creatively minded’.
Oh dear. Five years later, Abbott has more than proved the observation
wrong.
Although recently redeployed within the organisation, Abbott’s last
summer as marketing chief could not have been more of a triumph. The
’affordability’ and ’obsession’ campaigns he had sanctioned from BMP DDB
in 1996 had pushed Volkswagen’s sales to an all-time high in 1997. To
add to this, Volkswagen swept the board at every major creative contest
in the world.
But this is more than a story of great advertising; it’s also a
demonstration of how an agency can add value to a client’s whole
business strategy.
Volkswagen has long been famous for its advertising. Back in its
earliest days at Doyle Dane Bernbach, the brand was synonymous with some
of Bill Bernbach’s greatest ads. Its London heritage, first through DDB,
then BMP DDB after the two agencies merged in 1989, has been just as
impressive.
Early on, DDB maintained Bernbach’s legacy with ads which concentrated
on the product. In the early 80s, the focus moved to mechanical
reliability. ’Squeak’, in which an earring is the problem, exemplified
this era perfectly.
Then, almost imperceptibly, the advertising took on a new quality:
emotional reliability, as demonstrated by ’divorce’. Most recently,
BMP’s ’affordability’ work has an added an extra dimension to the
heritage.
Insiders acknowledge also that the relationship between client and
agency has changed as it has matured. In the early DDB days it was built
purely on great advertising. Volkswagen’s faith in DDB’s ability -
particularly that of the creative director, Tony Cox - was unshakeable.
Post merger, BMP DDB has added strategic insight to great advertising.
Since 1994, the agency’s contribution has become central to Volkswagen’s
UK overall business strategy.
But as the agency itself readily admits, it is clients such as Abbott
that have made all the difference, helping to anchor the relationship in
those rare qualities of mutual trust and admiration.
Peter Clay, deputy managing director and head of the Volkswagen business
at BMP DDB, says: ’I have worked with four marketing directors and three
advertising managers and, with one exception, they have all had a
brilliant eye for creative work.’ The praise is mutual. Johnnie
Meszaros, Volkswagen’s marketing manager in the 80s and early 90s, says
of the agency. ’Our work’s been so good because BMP has a genuine belief
that they are partners in our business.’
The clients have been a mixed group over the years. In the 80s and early
90s, Meszaros brought flamboyance to the job and even went on to write
ads himself, picking up a bronze Lion at Cannes. Meanwhile, Abbott’s
softly spoken style has belied a gritty determination that has
completely altered Volkswagen’s sales and advertising focus. But what
they all have in common is an ability to spot good advertising, buy it
and defend it to the hilt.
But here’s the quirk: since Volkswagen tends to recruit internally,
moving staff between departments, few of their marketing directors start
with any marketing or advertising knowledge. Clay believes this a
significant virtue: ’These people have a long-standing relationship with
the company’s culture. They don’t come in itching to change strategy,
unlike some marketing professionals, and they know that they will have
to live with the decisions they make.’
The roots of this almost symbiotic relationship go back to 1968 when DDB
London first took on the business.
Creatively, DDB produced memorable work. Marty Feldman was used to show
that ’ugly can be beautiful’. In the 80s the ’falling cars’ campaign,
devised to challenge cheap Japanese imports, tested that other great
feature of DDB’s tenure of the account - its reputedly strong
relationship with the client.
Peter Pleasance, now retired, ran Volkswagen’s UK account at DDB, and
remembers how the bond held: ’It took courage to say: ’We’re going drop
your car from 20 feet and we don’t know what it will look like when we
do.’ Many clients wouldn’t have bought it.’
It was this kind of faith that was to be tested again in 1989 by the
DDB/BMP merger. Once again, Pleasance recalls that Volkswagen was
sanguine about the news, because ’we’d worked with them for 30 years and
they trusted us’.
If there were any concerns, they were over BMP’s reputation as a
’planning’ agency, a discipline that VW did not embrace at the time.
Meszaros was marketing manager during the changeover and had always
bought his advertising on instinct, including such spots as ’casino’. ’I
was always a bit afraid of the strength of BMP’s planning but I did come
to believe that it could be helpful as long as it wasn’t given more
power than it deserved,’ he admits now.
Over the years, however, it is clear that Volkswagen has converted to
strategic planning. Clay identifies two seminal moments, the first being
the ’God Bless the Child’ commercial in 1990, one of the first
Volkswagen ads made by the then newly merged agency. ’The brief used the
relationship between a father and his daughter as a metaphor for the
Passat. The car provided sanctuary for the family, and that was a
planning insight.’
The second came with the hiring by BMP of the planner, Cathy Reid, from
Vauxhall in mid-1994. Reid’s varied agency and business experience gave
her a wider perspective on Volkswagen than a traditionally trained
agency planner might have had. It also made her keen to get as involved
as possible in thinking through the solutions.
Her hiring coincided with Abbott’s arrival and a change in Volkswagen’s
business imperative. The German parent took control of its UK
distributor and dealer network from Lonrho and announced ambitious plans
to expand sales. But the strong Deutschmark meant Volkswagen, whose cars
were already perceived as expensive, was even more exposed on price.
Abbott was thus faced with the task of altering the company’s entire
marketing strategy -which is where Reid, working alongside Volkswagen’s
strategic planning unit, came up with a drastic rethink that ultimately
led to the ’affordability’ campaign (see box). This was not without its
risks. Clay recalls that the shift required both client and agency to
hold their nerve for two years. He merely says: ’Abbott was a giant. We
were lucky enough to stand on his shoulders.’
With the campaign’s success now rubber-stamped, it is perhaps the right
time for Abbott to have moved on. And although it is a heavy mantle for
any new marketing director to take on, Chris Craft must feel the future
looks good. With VW never having looked healthier as a company and its
relationship with BMP at a new high, the combination looks as strong as
ever.
HOW ’AFFORDABILITY’ CHANGED CAR BUYERS’ PERCEPTION OF VOLKSWAGEN
It may not seem so now, but launching Volkswagen’s ’affordability’ work
was nerve-wracking. As John Abbott, former head of marketing, says: ’It
was a risk, but we knew we had to take it if we wanted to be a volume
player.’ The move has clearly worked: UK sales reached an all-time high
in 1997.
But ’affordability’ was more than just a new campaign. It represented a
major shift in marketing and advertising strategy that embraced
everything from communications to pricing and car specifications.
The catalyst came when Volkswagen took control of its UK distributor and
dealership from Lonrho in the mid 90s and announced ambitious sales
targets. Already perceived as expensive, Volkswagen struggled further
with the strong Deutschmark.
Prices were realigned and specifications improved. However, led by BMP’s
Volkswagen planning chief, Cathy Reid, the agency identified that the
message was still not getting through.
According to Reid, ’Despite the improvement, consumers still believed
that Volkswagen cars were way beyond their price bracket.’ This was
crucial. In the car-buying process, consumers typically shortlist three
makes around their price bracket. Unless consumers believed Volkswagens
were affordable, its chances of being shortlisted would be reduced.
Thus, in 1996, the thinking behind ’affordability’ was born. The key, as
agency and client realised, was to challenge the perceptions of
consumers head-on. That meant, as Clay says, ’doing something different
in communications terms’.
The solution was to use TV over a sustained period to push home the
affordability message. Extra money was found to back the work, even
though it meant that other marketing support - such low-rate finance -
was cut. Moreover, Volkswagen had to find a way to apply ’affordability’
to all its cars, another change from the previous Golf-led image
campaign.
Reassuringly, tracking on the ’affordability’ campaign revealed that
Abbott’s plan was paying off. Having been perceived as 28 per cent worse
value for money than other cars in 1995, it improved significantly to 4
per cent above the average this year. The likelihood of being
shortlisted also rose. In 1995, Volkswagen was 71 per cent below its
competitors.
Now it is 12 per cent above the average. At the same time, the marque
lost none of its other attributes: on quality it outscored the average
by 119 per cent, on reliability by 89 per cent, and on stylishness by 9
per cent.
Is this the result of the advertising? ’Yes,’ Richard Butterworth, a BMP
board planner, says. ’If you compare this with 1993-4, when prices had
already been cut hugely, there was no improvement at all. The evidence
would suggest that the advertising was a driving factor in improving
customer perception.’
