- VW says it has scaled back some ads after diesel scandal
- Living `with the legacy of being a brand that has cheated'
In the 1950s and ’60s, when bigger meant better in American consumer culture, Volkswagen built its brand with ads that poked gentle fun at its diminutive vehicles. One early campaign featured a tiny Beetle perched in the corner of an empty page over the words “Think Small.’’ Others bore taglines like, “And if you run out of gas, it’s easy to push,’’ or “It makes your house look bigger.’’
Following revelations the company rigged emissions tests for millions of its diesel engines, Volkswagen should use simple ads that hark back to those early days to rehabilitate its tarnished image, marketing and crisis-communications professionals say.
“Once they get the facts straight, they need to communicate in a very clear way how they will fix the problems and apologize, but just once,’’ said Brian Elliott, chief executive officer at ad agency Amsterdam Worldwide, which has worked for VW and was a finalist last year in a contract with Skoda, its Czech brand.
Elliott points to General Motors Co. as an example. Faulty ignition switches in GM cars have been blamed for more than 100 deaths, and the company has agreed to pay $900 million to settle a criminal probe by the U.S. Justice Department over the issue. Elliott praised CEO Mary Barra for openly addressing the situation.
“She was front and center, going in front of Congress, the press and the industry,” said Elliott. “She did not shy away from what the moment demanded of a leader. And that has surely helped salvage GM’s reputation.”
Volkswagen has hired U.S. law firm Kirkland & Ellis LLP, which led BP Plc’s defense in the criminal investigation of the 2010 Deepwater Horizon oil disaster, to help it deal with the widening scandal. But VW declined to say whether it has sought outside help to shape its messaging.
The company has removed some advertisements and delayed or changed others, according to spokesman Nicolai Laude. “We’ve taken a close look at our advertising and marketing
strategy due to the current events," he said. "We’ve adjusted certain aspects accordingly.
‘Just One Thing’
A campaign promoting the new Touran small sport utility vehicle has been scaled back due to the crisis, and full-page ads in German papers marking the 25th anniversary of German reunification this weekend addressed the scandal.
“We were planning to say here how happy we are Germany has become one country again," read the ads, just unadorned text on a white background. "But now we want to say just one thing: We’ll do everything to regain your trust.”
According to Brand Finance, a London marketing consultancy, the value of the Volkswagen brand has dropped by $10 billion, to $21 billion, and the company risks losing its ranking as the third most valuable automotive nameplate, behind Toyota and BMW.
“The brand will be repairable, but it’s certain the impact will be massive,’’ said Jim Prior, CEO of London branding consultant Lambie-Nairn. “They will have to live with the legacy of being a brand that has cheated.’’
Though VW was criticized for running ads touting its green credentials after news of the cheating broke, Prior cautions against halting advertising altogether. For starters, it’s tough to do: Billboards and magazines are typically booked weeks or months in advance, and Websites, television stations, and daily newspapers would likely charge hefty cancellation fees if they can’t resell the space.
More important, though, is that Volkswagen remain in the public eye to remind consumers of all of the positive feelings once evoked by the brand and bury the unsavory taste of scandal. The tone must be simple, serious and somber, yet remind the public Volkswagen makes great cars. “They should focus on that story," Prior said, "although don’t claim fuel economy as part of the story.”
Stuart Leach, who heads the crisis department at Bell Pottinger, a London public relations firm that has worked with unpopular figures such as Belarus President Aleksandr Lukashenko and South African apartheid-era leader F.W. de Klerk, said Volkswagen must show real concern about the situation, accept full responsibility, and vow it will never happen again -- in a believable way. The company needs to separate the brand from the scandal, and it isn’t yet moving quickly enough to achieve that, Leach said.
“Brand trust right now is out the window,’’ Leach said. “Narratives get set very quickly and once they are set it’s difficult to shift them. And Volkswagen doesn’t have a compelling one now.’’