Following the news that Volkswagen New Zealand was set to part ways with its agency of around two years, Colenso BBDO, and the recent discovery of dodgy software that cheated on emissions tests, FCB New Zealand has been handed the creative business—and been given a pretty big challenge to help the brand win back people's trust.
FCB already handles the media for the European Motor Distributors portfolio, which includes brands Volkswagen, Audi, Porsche & Skoda. And, as FCB has mentioned before, it feels it gets the best for clients when each department works together, something it showed when working with BMW/Mini on the Driving Dogs campaign. FCB lost that business to DDB and missed out on the Holden account recently, so it, like Assignment and Ogilvy, have been on the hunt for some replacement automotive action.
Volkswagen has been approached for comment about the pitch process and its comms strategy, and national marketing manager Ben Montgomery said: "The pitch process is done and dusted. As for our strategy, our priority is on looking after Volkswagen customers and all communication channels will need to support this."
Tom Ruddenklau, general manager of Volkswagen New Zealand, said in a release that the partnership with FCB will play an extremely important role in the next, presumably quite difficult, phase of the brand’s future.
"We’d like to thank Colenso BBDO for all of their work on Volkswagen with particular highlights including the work on ‘The Peoples Film’ and ‘Reduce Speed Dial’. From this point forward we are absolutely focused on restoring New Zealander’s trust in Volkswagen and ensuring our customers are looked after. That will remain our priority.”
While Volkswagen made good inroads into the New Zealand market a few years ago with keen pricing and some solid advertising from DDB that aimed to change the perception that it was an expensive, cold, inaccessible European car brand, sources say marketing budgets have been cut significantly and it's planning on using more international material. And, if history is any guide, that's unlikely to hit people in the feels.
Ruddenklau initially said the "emissions software discrepancy" didn't affect any New Zealand cars because they were made in the US, but that changed as new information came to light and in a statement a few days ago it said 4,639 of the 75,000 Volkswagens on New Zealand roads are affected. It also affects 1,600 Audis and 1,328 Skodas.
“While Volkswagen New Zealand did not know about the software discrepancy, we would like to apologise for what has happened. We value the trust our customers place in us and we will be in contact with them as soon as a solution is identified,” said Ruddenklau. It said further updates will be released as the company works through the issue. And it has set up an FAQ page on its website.
So can the brand recover and win back people's trust? When asked about the Volkswagen scandal last week, ex-chief executive of Cadbury New Zealand Matthew Oldham said a consumer's relationship with a brand is like any personal relationship.
“In the case of a breach of trust there is shock, followed by anger, followed by a need to have a cooling off," he says. "Time is a great healer, so it can be counterproductive doing much more than apologising and correcting any wrongs until consumers have moved out of shock or anger modes. Patience is key, which can be difficult in listed multinationals.”
And he said the trust can be rebuilt by demonstrating you still have the brand and product qualities consumers loved in the first place.
“Innovation, effective advertising of your core virtues etc. Some relationships will be over forever no matter what you do, but most come back eventually and new consumers can be brought on board.”
He says pricing is really only a short term tactic to keep business moving while the crisis plays out (although there's sure to be a few good deals on offer). But if you don’t work to rebuild the brand qualities, relying on pricing will wear off and the brand will eventually fail. And in the case of Volkswagen, he believes it is too early to start any advertising charm offensive and "it might take five years for loyal consumers to forgive them".
DDB's chief executive Justin Mowday, who worked with the brand for a number of years, said: “If you accept that a brand is made up of all the impressions people have of it, how they interact with it, what the headlines say and what the product is like, then this will have a big impact." Fuel efficiency and low emissions were used as a major selling point, so there will be plenty of disappointment among those who have bought one on that basis and Mowday believes the willful deception will call into question all of its marketing claims.
“They’ll probably look at it and think they’re buying a lemon and wonder 'is there something they’re not telling me? Does it really go from 0 to 100 in that time?'”
Still, he agrees with Oldham that time is a great healer. He says Volkswagen was a fantastic brand that made pretty damn good cars and pretty damn good ads, so it's a shame to have put that legacy in jeopardy (Adweek says the goodwill VW had built in its brand as a result of all that quality advertising was valued at US$23 billion in 2014). Companies are meant to have systems and processes in place to stop this kind of thing from happening, of course, although as more products learn how to lie through advanced and regularly updated software, some believe this is just the beginning of an ethically murky era where regulators struggle to keep up with the trickery employed by the commercial world.
Volkswagen says the fraud is the result of a small rogue team but others believe it is more systemic (although one of the complaints to the German authorities came from Volkswagen itself). So depending on how far up the chain this deception went, Mowdays says advertising can play a crucial role in the rebuilding process and he has seen too many examples of the “unreasonable power that emotional advertising has on people.” And it seems like Volkswagen will be needing a fair bit of it.