Until now, Cadillac has proven the adage: “Nothing hurts a bad product more than good advertising.”

December 10th, 2013

This morning Cadillac introduced a new campaign from its new agency (Adweek 12/1013). The good news is that for the first time in a decade and a half, the product is as good or maybe better than the advertising.  The new ATS and CTS are getting rave reviews from the industry pundits and there seems to be broad agreement that finally, the Cadillac product is up to the job of moving the brand into the rarified air of Tier 1 luxury where Mercedes-Benz, BMW, Lexus and Audi compete.

The Cadillac brand has been through a lot of marketing fits, starts and shifts over the last decade and a half. Messaging has been inconsistent and no real brand values established. That said, there have been some terrific ad campaigns that have gotten the brand noticed, unfortunately the product wasn’t as good as the advertising.

In the 2002 Super Bowl, Cadillac introduced its “Breakthrough” campaign (from Leo Burnett) hitting the heart of the boomer generation with Led Zeppelin:

The Breakthrough campaign really helped Cadillac get noticed again after years of being ignored by boomers who were buying Mercedes-Benzs, BMWs, Lexi and Audis.

In the mid-2000s Cadillac changed agencies (to Modernista) and produced this commercial for its “Life. Liberty. and the Pursuit” campaign:

In 2008, Cadillac introduced Kate Walsh as a spokesperson and raised a few eyebrows:

In 2010 Cadillac moved it’s business to Fallon which took a shot at differentiating brand as “The new Standard of the world:”

Cadillac has certainly done it’s share of less than memorable ads over the years, but I would argue that each of these campaigns were trying to put a stake in the ground to establish some core values for the brand with advertising that was pretty darn good. The trouble has been that even if the advertising drove some new younger customers to the store to take a look at a Cadillac, they were met with a product that didn’t live up to the standards they had become accustomed to from the genuine Tier 1 competitors.   They walked away.

Now the product is reportedly up to those very high standards and Cadillac has a new advertising agency called Rouge (a meld of Lowe Cambell Ewald and Hill Holliday). As I mentioned at the start of this post, this morning Cadillac introduced a new brand advertising campaign:

The new campaign really attempts to establish Cadillac’s creds as ‘American luxury,’ an approach that I think makes a lot of sense for the brand.

For the first time, the product is at least as good as the advertising, now the only question is will the marketers stick with the strategy consistently and long enough for it to take hold and truly establish the brand’s core values?

Oh, and the new logo without the laurels is terrific.

On the cusp of……slipping the needle in.

December 9th, 2013

Last week the auto industry reported US sales and what a great report it was!  Just scan the headlines:

“Out of the Doldrums, Automakers Post Strong U.S. Sales.”  –New York Times 12/3/13

“Brisk Demand Lifts Car Sales”  –Wall Street Journal 12/4/13

“Auto Sales for November Hit Fastest Pace in Almost Seven Years…Industry Bullish on Growth”    –AdAge 12/3/13

“Industry rides toward 2014 on a high” Automotive News 12/3/13

“Strong US sales boost Detroit Three Car Makers”Financial Times 12/3/13

Just this morning Automotive News reported:

“Likely from Santa: Soaring SAAR for December, big ’14″

So the march out of the recession continues for the auto industry, some forecasters are even predicting that in 2014 the industry could retail 17MM units again.  Forgive me, but I find these predictions a bit unsettling. I’ve seen the boom and bust of cycle of the industry a few times and each time we go through it, I quietly say to myself, “Ok now we’ve learned our lesson.”

It was just a few years ago that the country was thrown into the worst recession most of us can remember. Auto industry sales collapsed to 10.4MM units in 2009 and Chrysler and GM went through bankruptcy. Bankruptcy gave the domestic manufacturers an historic opportunity to rid themselves of excess production capacity and correct one of the industry’s long term bugaboos, we were simply making more cars than people wanted to buy.  Too much production led to inflated inventories which in turn led to marketing that relied heavily on incentives and made price virtually the only criterium for purchase. We taught consumers to ‘buy the deal.’ Promotions are a necessary part of any business and there will always be times when incentives need to be used, but using incentives became the SOP of the industry (particularly the domestics) and made it impossible for anyone to make money.

For the last couple of years, with the recession just behind us, the industry has shown restraint. Production and inventories were kept under tight control, fewer incentives were used and low and behold, margins increased! This has been great for the industry and things are really on firmer footing than anytime in recent memory.

But, will the industry become a victim of its own success……again?! Read the rest of this entry »

What the auto industry can learn from North Face

November 17th, 2013

Yesterday’s New York Times had an interesting article on North Face, the outdoor clothing company: North Face keeps walking the tightrope between exclusivity and the mass market.

The question was: how is it that a brand like North Face maintains its perception as a premium or exclusive brand when it sells to just about everyone from kids and suburban moms to elite mountaineers, hikers, trekkers, runners, and skiers?

If you read the article you’ll see that the President of the company actually says that they don’t pay much attention to analyzing who buys their products. They don’t know the demographics of their customers and aren’t to worried about it. He acknowledges that they know where their products are sold and that their “core customers” (NYTs 11/17) are centered around four activities: “hiking, trekking and mountaineering, running and training and snow sports.”

It struck me that North Face is a good example of a company that understands that “people don’t buy what you do, they buy why you do it” (see my prior post). North Face is very clear about their brand core values. They make products for serious, elite athletes who participate in the aforementioned activities. Their products are designed to meet the rigorous conditions these core customers routinely find themselves in.

The fact that so many people are willing to pay for North Face products, despite not being elite athletes, has been great for business but hasn’t changed the North Face “why you do it” one bit. Despite being sold in Dick’s Sporting Goods and commanding a 33.5% share of market, North Face has maintained its image as serious gear for people who test the limits because they have never lost sight of their core values and continue to execute against them: “Committed athletes, meanwhile, say North Face has managed to maintain, and even improve, it’s quality control and innovation.” ( NYTs 11/17). They haven’t adjusted their “why you do it” to reflect new opportunities or potential customers, volume has come to them because they are perceived as doing something special.

The automobile industry struggles with this idea of sticking to core values. Brands are stretched to the limit to increase volume and the potential for profit.

Porsche is a great example of a brand that has stuck very close to their core values of engineering and performance. Although known for exceptional sports cars, Porsche has successfully expanded it’s line to include SUV/Crossovers and a four door sedan by making sure that every model delivers on being the “Porsche” of that particular segment (i.e. the best performing and driving vehicle). Porsche has stuck to its knitting and volumes have grown dramatically, just like North Face.

Volkswagen is trying to walk the same “tightrope,” but has chosen to do it differently. Read the rest of this entry »

“People don’t buy what you do; they buy why you do it.”

October 29th, 2013

Simon Sinek spoke at TED in September, 2009 and he offered this wisdom about leaders and powerful brands: “people don’t buy what you do, they buy why you do it.”

I was reminded of this in a conversation with a colleague in the automotive industry.  He asked me what I thought of his most recent advertising.  There was nothing decidedly wrong with the advertising but it fell into the trap of doing what Sinek called speaking from the outside-in.  In other words the advertising basically said we sell luxury cars that have these mildly interesting features.

I told my colleague that I felt that the advertising didn’t have a point-of-view that came from the brand and therefore it fell short of having the power to change perception.  I spoke about the need for “core values” that in turn would shape the brand’s perspective.  I suggested that he needed to find the 2 or 3 immutable truths about the brand without which it wouldn’t be the same brand.

Sinek gets at the same issue by asking:  “What is your belief? What is your cause?”  Another way to express it is: What is your company’s or brand’s ethos, what are your guiding principles?

People don’t buy what you do; they buy why you do it.

How can it be that in an industry where we expect people to make the second largest purchase of their lifetimes (a home being the largest) the “why you do it” piece of strategy gets so little emphasis.  We know this to be true because so much of the marketing in the category is uninspired.  Most of it emphasizing features and pricing in mildly entertaining executions.

But there are a few great automotive brands that do understand “why they do it.”  Mercedes-Benz, BMW, Audi, Jeep, Suburu, Lexus all come to mind.  Each of these brands have a defined “why they do it” that truly shapes what they make and at their best how they market it.

Despite from time to time losing their way, these great automotive brands always seem to come back to their “why they do it.”

Recently, Mercedes-Benz introduced their latest S-Class.  The S-Class has always been the epitome of what Mercedes-Benz represents.  True to form, the S-Class marketing overtly expresses the brand’s “why they do it:”

While I don’t love the line “The best or nothing,” it is a literal translation of “das beste oder nichts,”  the company’s “why they do it” in the founder’s own words. Somehow editing the translation seems inappropriate.

Just today Jeep announced the introduction of the new Cherokee and despite having seemingly lost their way in recent years, here comes a new campaign about the joy of adventure and exploration, values that have always been at the heart for the brand: Read the rest of this entry »

Do customers really want an “experience” from automotive manufacturers and their dealers?

October 14th, 2013

I don’t know about you, but I really don’t want to have an “experience” with my automobile dealer.  I don’t want my dealer to send me birthday cards, acknowledge my anniversary, or give me special gifts that reflect my personal preferences. I’m not even sure I’m open to periodic emails from the dealer or manufacturer because somehow “periodic” becomes every other day. I don’t want that kind of relationship with the company(ies) I purchased my cars from.

Yet automobile manufacturers seem intent on differentiating themselves based on “experience:”

“The need to deliver exceptional, truly differentiating customer experience has never been greater,” Steve Cannon,  CEO, Mercedes-Benz NA, Automotive News 1/21/13

“Lincoln wants customers to receive the kind of pampering, both at dealerships and online, that they would get at luxury hotels.” Automotive News 8/20/12

This is not new, the industry, particularly the luxury marques have been working on improving customer experience for years. These efforts were precipitated by the introduction of Lexus. When Lexus was introduced in 1989, the DNA of the luxury segment and the whole industry was re-arranged.

Customer service was re-defined. Read the rest of this entry »

Americans becoming more “European” in our automotive tastes…will wagons make a comeback?

July 23rd, 2013

Americans’ taste in automobiles is becoming a little more European. The fact that Ford and GM are marketing truly global cars like the Fiesta, Focus and Chevrolet Cruze with only minor modifications to reflect local tastes supports this view. Diesel, while still a tiny portion of the US market, is increasing in share of market, propelled by the efforts of VW, Mercedes-Benz, Audi and BMW.  GM has even announced that they will offer a diesel-powered Cruze in the US.

Even the hatchback, a configuration traditionally rejected by Americans is becoming more accepted:  ”Five-door hatchbacks, popular among European families but long regarded as boring by Americans are catching on.  They now make up almost half the retail sales of Ford’s small Fiesta and Focus” (Financial Times).  Hot hatches like the Focus ST and Golf GTI make this segment even more appealing.

All this change is exciting and I hope that it signals a long-term adjustment in Americans’ view of automobiles.  Selfishly, I hope it will culminate in a re-appreciation of a body style seemingly lost to the sands of time…the full-size station wagon.

Europeans have a very different view of wagons, for one thing, they don’t call them “wagons,” they’re called “estates,” “Touring” or “Avants.” Just the language around the body style is better. It also helps that they have had some of the most beautiful well-designed wagons to choose from for years. For example, look at this Audi 5000 from the eighties, over 25 years old and it still looks great and feels very modern:

images-1

For many Americans the idea of a station wagon became undesirable because of its connection to the newly suburban world of the post war years.  Most of our mothers drove a domestic version like the Ford LTD Country Squire, here’s a good example complete with faux wood, driveway and lawn: Read the rest of this entry »

1st post in 18 months…been busy creating an agency, reintroducing Lincoln and winning 2 Gold Lions and 1 Bronze at Cannes.

July 8th, 2013

It has been a long time since I sat down to write a post on my blog. The fact is, I haven’t had time until now. Eighteen months ago I accepted a job as President of what would become Hudson Rouge. The mission was to create an agency for Ford’s Lincoln brand in New York City.  I was employee number one.  Our goal was to “introduce” Lincoln to a whole new audience who knew very little about the storied brand and mostly thought of it as something their grandparents coveted.

Over the course of the first year we hired almost 50 people in New York, created great space in New York City and eventually named the agency Hudson Rouge.  Hudson Rouge was a reference to the fact that the Lincoln Agency Team would be located both in New York City and Dearborn, Michigan. Both cities happen to be on rivers that played a major role in their development, the Hudson River in New York and the River Rouge in Dearborn.

While hiring the team in New York, getting to know one another, getting to know our colleagues in Dearborn, getting to know our clients, and developing the agency’s eventual home, we also dug into Lincoln and figured out strategically how to re-present the brand to America.  The new brand was launched on December 3rd, 2012 with this commercial:  Read the rest of this entry »

Does the concept of “Tier 1 Luxury” have a future?

August 10th, 2011

If you follow the luxury segment of the automobile business in the US, then you know that the best and most powerful brands are those considered to be “Tier 1.”  They represent the largest volume brands in the segment, have the most loyal customers, command the highest margins, have the highest resale values, are the best defined, are the most prestigious and the most desirable.

Every Tier 2 brand aspires to be in Tier 1.  Audi set the target years ago to become a Tier 1 brand and some would say that it has achieved that goal.  More recently Cadillac has made no bones about the fact that it wants to be a Tier 1 brand and has set it sights on BMW.  Infiniti is striving to make it into Tier 1 and Jaguar would like to return.  The fact remains that only Mercedes-Benz, BMW and Lexus have achieved the volume, credibility and prestige to be true Tier 1, everyone else is Tier 2:

That said, I think the goal of becoming a Tier 1 brand may be a fool’s errand in today’s luxury segment.  It made sense almost 20 years ago when Audi set that as the target but does it really make sense today?

Tier 1 is full of accepted conventions that must be present in order for the brand to be truly Tier 1.  For example, in the Tier 1 world, all dealerships must be exclusive and should be Taj Mahals built to reflect the prestige and loftiness of the brand they represent.  In these Taj Mahal dealerships, customers must be served lattes, have a customer experience befitting their level of success and certainly not have that experience sullied by the presence of mass market product or customers.  In Tier 1, as defined today, manufacturers must offer three sizes of sedans, at least two cross-overs, a sports car as well as a tuner division that churns out high performance model variants.  In traditional Tier 1, it is essential to have a D-segment (think MB S-Class, BMW 7-Series, Audi A8) sedan that represents the brand’s ultimate execution of a luxury vehicle.  It’s pretty rarified air up in Tier 1, but if you can get there, profits and volumes are huge.

Here’s the rub, the whole Tier 1 paradigm has been built around the baby boomer generation and I can’t help but wonder if the conventional thinking about Tier 1 runs the risk of taking a manufacturer down a path that will be less relevant in the future.  Read the rest of this entry »

Porsche’s “Everyday Magic” campaign. What were they thinking?

April 8th, 2011

Years ago, the enthusiast crowd and many industry observers were appalled at Porsche’s introduction of the Cayenne. Clearly an effort to build volume and profit for the company, many feared an SUV would destroy the Porsche brand.

The naysayers (me included) were wrong. The Cayenne has gone on to be the brand’s biggest seller and I think it’s fair to say that the 911 just keeps cruising along as one of the world’s premier sports cars. One of the reasons that the Cayenne did not damage the Porsche brand was that Stuttgart was incredibly clear that the Cayenne would be the “Porsche of SUVs,” in other words, a high performance SUV. Jeff Zwart (a Porsche factory driver as well as commercial director) directed, participated in and produced this Cayenne introductory video for Porsche:

Road to Cayenne

Obviously, the sole purpose of this video was to establish the Cayenne’s performance credentials and lineage.  Porsche successfully expanded volume by introducing a product true to the brand’s core values and marketed it successfully based on those values.  In fact you could argue that Porsche is doing exactly the same thing with the Panamera (introducing the “Porsche of four door sedans”).  We could debate whether the world needs another high performance sedan given Audi’s S models, BMW’s M series and Mercedes-Benz AMG models, but so far Porsche Panamera sales indicate that from a product point of view, Porsche judged the market well.

Porsche has successfully proven that it can expand volume by carefully developing line extensions that reflect the brand’s core value of performance.

So why, would they allow their latest marketing campaign to go so far afield?  What would possess them to feature the iconic 911 and the very successful  Cayman in communications designed to demonstrate that they are not “just” high performance sports cars, rather they are excellent everyday drivers:

Do the marketing folks at Porsche really think that a perception of a lack of everyday utility is holding back sales of 911s? Really? Read the rest of this entry »

2011 New York Auto Show Press Conference Schedule

April 7th, 2011
Wed., April 20 Company Location
7:15 – 9:00 (breakfast) Opening Press Breakfast
(Carlos Tavares, Chairman, Nissan Americas)
Special Events Hall
9:10 – 9:35 Honda Level 3
9:40 – 10:05 Ford Level 3
10:10 – 10:35 Jeep Level 3
10:40 – 11:05 Nissan Level 3
11:10 – 11:30 Hyundai Level 3
11:35 – 12:00 Mercedes-Benz Level 3
12:05 – 12:55 (lunch) Chevrolet North Hall
1:05 – 1:30 Subaru Level 1
1:40 – 2:05 Scion Level 4
2:15 – 2:35 Volkswagen Level 3
2:40 – 3:00 Audi Level 3
3:05 – 3:25 Porsche Level 3
3:30 – 3:50 Jaguar Land Rover Level 3
3:55 – 4:20 Chrysler Level 3
4:25 – 4:45 Rolls-Royce Level 3
4:50 – 5:35 Plastics Make it Possible 1D05
Thurs., April 21
8:15 – 8:45 (breakfast) World Car Awards Breakfast South Concourse
8:45 – 9:30 World Car Awards Press Conference South Concourse
9:35 – 9:55 Tokyo Motor Show Crystal Palace
10:05 – 10:25 BMW Level 3
10:30 – 10:50 Saab Level 3
10:55 – 11:20 Kia Level 3
11:25 – 12:15 (lunch) Mazda Level 3
12:20 – 12:45 Fiat Level 3
12:50 – 1:10 Bentley Level 3
1:15 – 1:35 Lotus Level 3
1:45 – 2:05 Mitsubishi Level 1
2:10 – 2:30 Shelby Level 1
2:35 – 2:55 EV – Pavilion Ride & Drive Level 1
3:05 – 3:25 Disney’s Cars 2 Crystal Palace
3:30 – 3:50 Bark Buckle Up TBD

* Schedule subject to change.

For more information about the Auto Show, go to www.autoshowNY.com.