2010: Audi, Sustaining the Brand Promise - Case Study

Snapshot

A consistently high standard of car marketing has turned Audi into an iconic, best-selling brand in the UK.

Key insights

• Audi has championed integrated, consistent, innovative and creatively ground-breaking marketing for over 25 years with the famous strapline Vorsprung durch Technik.
• This has helped make the brand the modern icon of the prestige car sector with an enviable competitive advantage.
• The power of the UK’s approach to marketing is evidenced by the fact that sales in this market have out-performed those of Spain, France, Germany and Italy.

Summary

Audi has manufactured cars since 1909 in Ingolstadt, Germany and is the major premium brand within the Volkswagen (VW) Group. In the UK, Audi has now become firmly established as a leading force within the prestige car sector, famed for its engineering and admired for its commercial success.

Marketing has played an instrumental role in Audi’s inexorable rise from being a niche brand  to challenging for the lead in the prestige car sector. It is proof that consistent needn’t mean conservative, and that creative can also mean effective. For 25 years, Audi’s distinctive approach has continued to challenge the boundaries of convention in marketing and the car industry alike. It has become synonymous with one of the most memorable straplines in advertising: Vorsprung durch Technik.

Pushing boundaries

Vorsprung durch Technik has not just been Audi’s brand message, but has also underpinnedthe philosophy for its behaviour. Audi has always been innovative in the way it reaches its customers, pushing the boundaries of convention, expectation and technological possibility and proving the brand’s progressive credentials rather than just claiming them. However, this has never been about novelty for its own sake. Innovation has also allowed the brand to communicate in new and more relevant ways with the audience.

1. Launch of a new channel

• As car news became part of entertainment culture, in 1999 Audi created the Audi TV Channel. This was the first branded TV channel. It created a singular platform for prospective customers to engage with the brand at their own leisure within the context of TV entertainment and without the pressure of a showroom. In 2009 the channel moved from Sky to an on-demand model as it continued to evolve.

2. Imaginative content creation

• Since 1994 Audi has been a magazine publisher, producing a high-quality monthly magazine.
• In 2003, Audi created an edition of GQ magazine. The ‘Power Edition’ featured modern icons of power, including the Audi RS6.
• For the launch of the new TT, Audi offered contemporary versions of classic music tracks, with its ‘TT Remastered’ campaign.

3. Generating brand buzz

• To launch the A6, Audi partnered with the New Scientist for a competition, giving away a trip to space.
• 2003’s A8 campaign involved the biggest-ever single burst of outdoor activity with the wrapping of 80 landmark buildings with giant posters.

4. Going interactive

• Interactive TV has been exploited for a number of TV campaigns, giving viewers a chance to access more content and register interest.
• Audi was the first car brand to move online, winning awards for its creativity as early as 1996. Audi.co.uk functions as a virtual dealership, enabling customers to research and configure the perfect Audi.

Consistent integration

Integration has been a key tenet of Audi’s communication. Creative ideas are executed across every relevant channel, allowing consumers to have a seamless experience with the brand across the many touch-points they may experience in purchasing a car.

Integration has a multiplying effect for creative ideas. As the communications have been integrated across more channels, the marketing spend per acquisition has reduced, proving the power of integrated creativity.

Creative excellence

Since 1982 Audi has set the standard for great car advertising. It has used communications as a potent tool to create a distinctive identity for the brand. Audi’s witty, intelligent but understated tone of voice has earned it a place in the British public’s hearts and minds, and its advertisements get more than their fair share of attention.

“Any motor advertising that breaks the mould of the traditional car commercial, with its laboured shots of leather interiors, alloy wheels and sleek bodywork, is to be welcomed. Clearly a supporter of this philosophy, Audi has made a point of applying creative thinking in the development, not only to its cars but also to its marketing.” Source: Superbrands Volume VI

The brand has perpetually infiltrated popular culture and been a genuine talking point. Award-winning campaigns that exemplify this have included Villa, Number One, Wakeboarder and R8 Construction, which had the tagline: ‘The slowest car we’ve ever built’ (Figures 1 and 2).

Building close customer relationships

Customer retention is crucial in the automotive sector for long-term growth. Customer communications can build a sense of loyalty, and ultimately drive repurchase. Audi has developed an architecture of customer communications with a focus of fostering much tighter relationships with the brand: the Audi Customer Journey. This maps the ownership cycle and optimises communications within this.

Using all direct media channels (direct mail, e-mail, outbound telephone etc.), the tone and focus of each communication is varied to reflect the requirements at each ownership stage.

Audi has also built a predictive marketing database that understands the lifestage of each customer (Table 1). This ensures direct communications are timely and well targeted. The impact of this initiative has been marked: Audi’s loyalty rate has increased rapidly since 1987 (Figure 3).

Excelling at distribution

In 1982 Audis were distributed from the corner of VW showrooms nationally. A key part of the brand’s success has been to build a network of dedicated Audi Centres as tangible local flagships for the brand. These have allowed the brand to build local relationships with customers and offer integrated purchase and service experiences. The network has also helped galvanise the sales force. Most recently, the Audi West London Centre opened in 2009, including two floors committed to Audi’s brand heritage of Vorsprung durch Technik.

Developing a modern iconic brand

By 2010 the Audi brand was the modern icon of the prestige car sector. This is the consequence of years of single-minded brand-building. From once having been the outsider, then becoming a quality contender, Audi has set the agenda in the prestige sector.  Audi’s reputation among car buyers for ‘engineering excellence’ and ‘innovation’ has now overtaken BMW and Mercedes (Figure 4). Further evidence of the impact of marketing has been its rise in the car buyers’ consciousness, with brand awareness more than doubling. The Audi brand’s success has not been limited to shifts in brand image measures alone. It is now a brand with genuine momentum and advocacy among buyers of prestige cars, with the highest levels of advocacy, preference and buzz among this audience. Most crucially, Audi has become the most desirable and considered brand among the car-buying audience.

The numbers say it all

The ultimate measure of marketing success is the brand’s commercial success. Sales have increased radically over the last 25 years. Volume sales have increased by 452% and value sales by 1,325%. No other car brand has grown its share of the market at this rate, let alone managed to compete genuinely with the most established prestige brands.

Volume sales increased from under 20,000 in 1982 to over 100,000 in 2008 (Figure 5), while value sales have increased steadily since 1987 (Figure 6). Even before volume sales began to rise significantly, the brand was able to command an increasing premium per car as its reputation improved.

Audi’s market share has also grown consistently since the late 1980s, from 1.18% in 1982 to 4.73% in 2008 (Figure 7). The emergence of Audi’s brand is evidenced by the brands from which it has stolen market share. In 1987 the brands Audi buyers were most likely to switch from were Vauxhall and Ford. By 2008 these were BMW and Mercedes.

Moreover, since it began to compete actively in the prestige sector in the mid-90s, Audi’s share of this sector has grown from 24% to 33% and it continues to rise at the expense of its direct competitors: Mercedes has declined and BMW has stagnated.

While Audi’s commercial success in the UK has been impressive in its own right. The impact that its marketing approach has made is highlighted when measured against Audi sales in other European markets, with Audi UK sales significantly outperforming its European counterparts.

The performance of the Audi brand in other European markets (Spain, France, Germany and Italy) is the most solid control for highlighting the impact of marketing. The cars they sell are identical to the UK and have similar market dynamics, competitors and economies. The only independent variable in the UK has been the marketing approach, and the brand in the UK has far outgrown the European markets.

Since the inception of Vorsprung durch Technik, well over a million Audis have been sold in the UK, with the millionth reached in 2007. This feat would have taken until 2024 at the rate of Audi’s old competitive approach.

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