Chief Marketing Officer (CMO)
Audi of America
Are you optimistic about the economy? If so, what makes you feel that way?
"[W]e’ve historically been less of a ‘bling’ noisemaker brand and more of an inner substance kind of brand."
Yes, we are far more optimistic that America has hit bottom. We have seen positive signs in the marketplace: Foot traffic and Internet traffic are up. We have a waiting list for several of our very high-end cars. So we definitely feel hopeful about the economy.
How do you see the marketing of brands changing in the next five to 10 years?
This is a big question, but in the past there has been a hierarchy among brands. In the automotive business, this hierarchy is going to be shifting and moving more dramatically than it typically has before. Historically, if you had a technological advantage, no matter what that technological advantage was, you could hang onto it for a long time. Now, that advantage ends relatively quickly. Now, the new technology can stand out in the hierarchy more than the brands themselves. That is a relatively big shift. I think you see—whether it is the emergence of hybrids, the emergence of diesels, or technologies like these—where this is already happening, and that it can cause a lot of movement in the traditional brand hierarchies.
You mean the product brand can actually overshadow the masterbrand sometimes?
What unpredictable factor most impacted how you managed your brand in the past decade?
A fair amount of people did see this one coming, but I think it struck far more dramatically than most of us in marketing expected. What I’m referring to is the strong values shift that took place, particularly in the luxury segment. You had a long stretch in the marketplace of “more is more and more is good.” Now you have a significantly different set of values in the marketplace. As I noted, this is most apparent in the luxury segment where there is a return to quality and a return to things that have substance. There is a return to things that endure. I think that a lot of brands, traditionally strong brands, got a little caught out when they focused more on what I’ll call “false substance.” By this, I mean they put more emphasis on the noise as opposed to the substance.
Here’s what I mean by that: We’ve seen examples of competitive cars when the owner of a high-end car would literally go into a dealership and say: “My lease is up; I need to trade in my car, Mr. Dealer I need you to spec the exact same color, the exact same car. And in fact, I am not leaving here in dealer’s tags. I’m only leaving here with the actual licensed vehicle. I’m not picking it up until you have all of that in place because I need to make sure that when I go back to my office and back into my community that I am not sending the signal that I just purchased a flashy new and expensive automobile.”
This is a dramatic shift from just a few years ago when someone absolutely purchased that vehicle to make sure everyone knew that they had just bought something new and shiny.
This type of value shift, to speak selfishly, bodes well for Audi because we’ve historically been less of a “bling” or noisemaker brand and more of an inner substance kind of brand. Our cars offer the latest refinements and advances without the badge stigma that screams ostentation.
Definitely the biggest shift in luxury is this kind of social consideration. It has nothing to do with money. There is money out there. People are capable of spending money. That’s not the issue.
Is there a single touchpoint of your brand that you think will be more influential to your consumers in the next five years?
Until the past year or so many luxury goods consumers held to a mindset of letting somebody else handle things for them: “I’ll let someone handle my portfolio. Of course, my house is going to keep appreciating. Of course, I’m going to trust in my company to do the right thing,” and on and on.
But as you start to scratch the surface of what has happened systemically, people have lost trust—whether it’s in companies, whether it’s in politicians, whether it is their brokers, and whatever it might be. The touchpoint for Audi is to have the progressive appeal consumers can see for themselves. It’s not just based on past reputations, but what is tangible today. So we actually welcome the fact that someone is never going to come in to buy a car and just say “I’m just going to pay this lease point and that’s it, I’m not going to bother with the details,” and walk away. It will all be okay. We look upon opportunities to confirm trust. And opportunities to confirm trust can take place when the transaction happens—if you’re completely transparent. It can also happen when a car is configured accurately, quickly, and when everything is up to speed.
"I think there is a return to quality; I think there is a return to things that have substance."
The explosion in the social networking realm offers tremendous pathways for us to nurture that feeling of trust. Opportunities to confirm trust definitely take place when a customer goes to the Facebook Fan Page, sees the application that we have there, learns about the latest Audi developments, sees what other Audi enthusiasts are discussing. It helps existing and potential customers realize Audi is not just a lot of noise. So, social networking is going to be immensely important to us and obviously, there have been dramatic shifts in our allocations to the Internet, particularly social media. In just a few months, we built the second-largest Facebook fan base of an automaker – trailing only Porsche.. But if you really want to sum the whole thing up, we want to make sure that every time someone engages us, at some point, we have this concept of trust. You can’t accomplish this by switching your online marketing and other interactions into remote control. That can happen all too easily with marketing staffs. They think that everything is going to be handled by some mythical fan of yours out in social media. Or they think everything is going to be handled by the Internet or that everything will be handled electronically. Trust does come down to a fair amount of human interaction. We sell roughly 100 thousand cars. That’s a lot of hand holding across 300 million Americans, so we think we have a lot of opportunities to build trust in person, on the phone, online and in the dealerships. And then we have opportunities when handling the service in the car, too?
What points can you share from your experiences that contribute in building a successful brand?
First and foremost, based on what we did to turn things around at Audi is engage in we call a frank assessment of where your brand exists and where your brand sits. I think a lot of people spend an awful lot of time trying to be someone else when they engage in marketing strategies. They’ll say “I want to be that” or “I want to be them.” I think we see this first hand at Audi: All of our research tells us that there is this traditional hierarchy–“the rule of three.” Most consumers only have time to go through three brands. Most consumers only have time to try those three brands. Everyone else is vying for scraps of consumer attention that remain. These “rule of three” brands generally have a lot of the market share; they generally have a lot of the business. In the luxury automotive market that group consists of Lexus, BMW, and Mercedes. And what we’ve recognized here is that we want to position ourselves as, what we call, “a challenger brand.” We’re a brand that wants to map things in a more provocative fashion and wants to really challenge these traditional assumptions of luxury. But it’s important that we don’t just come to market and say we’re an old, established, luxury, “rule of three” type of brand. In the U.S., we’re not. Once you take on this mindset of being a challenger, then you can do all sorts of wonderful marketing tactics and advertising campaigns.
A lot of people say: “Why did you do that? Why did you do the inauguration campaign with a lot of money?” I can give you 1,000 reasons why it motivated consumers and generated a lot of buzz for the brand. One of the huge tertiary benefits of these things is it gives your retail environment a shot of confidence. Someone comes into their appointment with the sales coordinator down in the dealership and doesn’t say, “we cut our ad budget by 40 percent,” or “I don’t know the marketing department is up to.” Instead, they say “did you see the how Audi was so prominent during the presidential inauguration? That was fantastic.” So you have this rallying around the brand.
It’s important from my point of view for marketers to look at your communications to motivate employees and the environment as well as consumers. That is how you get the machine moving. It is particularly true in these last couple of months that have been difficult times. The last thing you want to do is just continue to seed bad news into your retail environment. They know what’s going on – they’re trying to get capital, they’re trying to book deals that have gotten a little trickier, they have an expense structure that is going through the roof. It’s important to make sure you motivate that entity because then you can accomplish a lot.
Do you feel that retail is especially critical right now?
Correct. When these dealers own a fair amount of franchises they don’t want a sales staff on the floor looking out at the dealership across the street saying, “maybe I should be selling cars over there.” You want them firmly planted saying: “Look at all the stuff they have going on here. They’ve got these new cars coming, they’ve got this new campaign that marketing guy told me about this. Cool.”
Prior to joining Audi of America as Chief Marketing Officer, Keogh, 37, worked at Mercedes-Benz USA for more than a decade. Most recently, Keogh was general manager, marketing communications, where he was responsible for developing all strategic marketing communications plans, including brand and product positioning. Previous positions at Mercedes-Benz included general manager, Smart USA where Keogh was responsible for sales, marketing, product planning and retail development for the new automotive brand. Prior to leading Smart USA, Keogh was responsible for corporate communications for MBUSA. Keogh has a Bachelor of Arts from Hobart and William Smith Colleges in upstate New York.