if “luxury kia” seems weird to you, read on

In teasers for what is sure to be a big Super Bowl ad push for Seoul-based auto manufacturer Kia (client of agency David&Goliath), the company is announcing the launch of a new model, hinted to be the brand's first true "luxury" vehicle. The jump into the luxury division is hardly surprising, as the brand has shifted towards more expensive models and trims over the last few years. While the decision is certainly bold, throwing a gauntlet at the feat of established luxury brands such as Audi and Lexus, it only formalizes what we already knew about Kia's future aspirations: To shirk its perception as an "economy" car.

Three years ago I wrote about the high cost of the redesigned Optima, which totaled around $26,000 at the time, and how it was an indication that Kia wanted to move up in the market. However, feedback on the article (available in the comment section) took issue with using the $26,000 price-point as a bellwether for the brand. The commenters all had fair points, but I believe were missing the forest for the trees, as the K900 clearly shows.

The point was not that Kia couldn't effectively reach various market-strata through trim options, but that Kia shouldn't try to do that.

Conventional wisdom suggests the greater variety of your offerings, the more customers you will reach (and the more money you will make). However, that's not the case when it comes to branding. Bygone are the days when companies made money producing average products for the average person. To paraphrase Darwin: The market today favors the extremes; not the averages. Brands who try to expand their territory -- either trying to move up in the market, or down -- often find themselves in a dangerous place branding pioneer Al Ries calls the "mushy middle" of the market. And, this is a place even the strongest brands go to die.

"When management sees the great success of its brand, the next thing they usually say is, ‘What else can we get into with our hot brand?'" writes Ries' daughter and fellow branding maven, Laura, in a 2010 article about this concept. "The answer is usually trouble." Laura uses Gap as an example; a brand once known as a "the" place fashionable, basics in apparel. Then, Gap success caused it to expand, adding GapBody, GapKids, and GapBaby. However, as Laura writes, Gap discovered that its core customers -- teenagers and 20-somethings -- didn't want to wear the same clothes as baby's and kids.

"All the expansion diluted the power of the Gap brand," Laura writes. Gap's hot brand turned into a hot mess. It lost its identity, and competitors had a foothold to overtake this once powerhouse name in fashion. It is no coincidence the company's strongest sister brands today are those occupying the low end of the market (Old Navy) and the high end (Banana Republic).

Taking this same principle and applying it to the auto industry, it's obvious why brands caught in the mushy middle, in particular American automakers, are struggling to carve-out an identity in a market that has evolved away from the everyday car for the everyday driver. The growing number of import options since the 1970s gave car consumers greater variety. As a result, the old model of a "one-size-fits-all" car gave way to a niche market where consumers could now be choosy about what they were looking for in a vehicle.

Today, there are domestic cars, "Japanese" cars (yes, people by cars simply by the fact that it is engineered by Japanese company -- the country itself has become a "reliability" brand), economy cars, luxury cars, hybrid cars, electric cars, etc. The strongest auto brands are those that clearly occupy a single space in the market.

There is little question that Kia is one of the strongest automotive brands right now. However, its success is largely because Kia is a brand born in the bottom of the market, which it then grew to dominate by producing a quality product for a budget price. In 2005, Al Ries even uses Kia as an example of a low-priced brand "doing great," while lamenting the "mushy middle" troubles of automakers like GM and Ford. Unfortunately for Kia, they must have overlooked his article.

Nobody can fault Kia with wanting to capitalize on its success. It's a natural thing, especially for an auto manufacturer; the existence of brands such as Acura (owned by Honda), Lexus (owned by Toyota), Infinity (owned by Nissan), and others are a byproduct of this desire for greater market share, especially at the top (Scion is Toyota's recent divergence into the low-end of the market). But, Toyota, Nissan and Honda recognized that it was better to create a new luxury brand than try to introduce a high-end model with mid-market brand ID. Many consumers have no idea those three luxury brands are really spruced-up, rebadged, lower-priced cars.

Even Hyundai, which debuted a luxury-model under its own brand, gave the Genesis its own logo and identity. Sure, it was the Hyundai Genesis, but you wouldn't know it from the badge. Hyundai recognized the need for keeping it at arm's length, even if it didn't want to fully commit to a full line-up of luxury cars.

However, Kia looks like it will release the K900 as a Kia, with a price tag decidedly un-Kia. And, that's the problem. The idea of a "luxury Kia" is an oxymoron in the consumer's mind; Kia stands for quality economy, not quality luxury. While the K900 is an astounding car on paper and will undoubtedly be one of the best "bangs for the buck" as luxury goes, the Kia consumer is not a luxury consumer, and portraying itself as a luxury brand dilutes the Kia name. Just like Gap, the move could have traumatic long-term consequences for the company.

At the moment, Kia enjoys the same sort of niche notoriety as its high-end German colleagues. Consumers know Kia as the premier economy vehicle, just as they think of BMW and Mercedes as the premier high-end vehicles. So, it makes little sense why it would want to leave a position occupied -- largely without rival -- in the economy market. A move to the middle would only cannibalize the success of its parent company, Hyundai -- just as Coke Zero merely cannibalizes the success of Diet Coke.

It's easy to sit back and suggest, "Well, surely if Kia got this far, it knows what it's doing." Yet, the same thing could be said for thousands of once-household names now defunct as a result of bad branding decisions, many of which were the same as Kia is making now. There is a reason why GM and Chrysler were bailed-out, and it wasn't all to do with Union-related overhead or quality issues. It was because everybody knows what an Audi is (German luxury, and thanks to the positioning work done by agency Venables Bell, it is becoming even more specialized as a German luxury auto for the younger generation), or knows what a Toyota is (Japanese reliability). There wasn't one "idea" consumers had about Ford, GM, or Chrysler, except they were "American" -- and the widespread availability of competitor imports (many of which are now more "made in America" than "American" cars) quickly showed how weak of a positioning that was.

In its teasers for the K900, the ad copy says "preconceived notions are the voices that distort reality." It's a great progressive philosophy, but it simply not true when it comes to a brand. A preconceived notion is the very definition of brand. Your brand is not what you say it is, but what a consumer believes it to be in his mind. That is why positioning in the mind of the consumer is one of the hardest, but most important aspects of brand management. It takes years, if not longer, to move the needle on consumers' "preconceived notions" about a brand. Hyundai's fight from the bottom to the middle of the market did not happen overnight.

Kia may very well think it's attempting to change the preconceived notions about the brand, but it's already been doing that over the last few years with industry-leading warranties, on top of industry-leading quality; not to mention stylish designs that challenge what an economy car has to look like. All Kia will accomplish with the K900 and the models that follow is muddying the waters for what the Kia brand "is" in the mind of a consumer.

an interview with paul venables

This week I'm writing an article for The Weekly Surge on Super Bowl advertising. I spoke with Venables, Bell & Partners Co-Founder and Creative Director Paul Venables about his experience putting together campaigns for advertising's biggest night. Venables and his team at VBP have handled Super Bowl ads for client Audi since its first spot in 2008. Since then, Venables helped rip apart the German luxury "aristocracy," campaign, after campaign. In this interview, he explains what goes behind making some of the Super Bowl's best commercials.

How does it feel to see your Super Bowl ad running?

"Having your ad play on the biggest stage imaginable, with millions and millions of viewers across continents, is a pretty darn exciting thing. Usually you're watching the Super Bowl in an atmosphere -- either party-like, or at least there's a spirit of good times and fun -- your ad comes on, and you just wish it could be longer. Commercials are so fleeting in our lives, so you watch a three-and-a-half or four-hour game…so you stole the audience's attention for 60-seconds but that's still pretty fleeting in the grand scheme of things. But it's worth it. It's a fantastic experience. When you go in designing something for the Super Bowl, I think your approach is a little different. There's higher stakes, so maybe you're a little bit more nervous. But, you know the opportunity is tremendous, and you keep kind of pushing yourself to do something great."

Was it Audi's idea to go for the holy grail of TV spots, or did you pitch that to them?

"We pitched that. When we pitched the business, we had a Super Bowl idea at the time. We, with Audi particularly -- this brand was doing all the right things from the product and engineering side -- the world just didn't know about Audi. The world didn't know that they were beating BMW and Mercedes at their own game. So we, with them, worked to shift their media dollars to be in more marquee events; to really stand out -- to create that conversation. And so we've done that from day one. The first one we did, you may recall, was the 'Godfather' spot, where the guy wakes up and instead of the horse-head in the bed, it's the front end of his luxury car. And we put old luxury on notice. That was our stake in the ground: Audi's here, shoulders back, chin up, we're coming at-cha. That was the gauntlet that we through down, and now here we are."

Is that why Audi is a good brand for the Super Bowl? It's not a mass market brand, but it's a brand that wants to get on everybody's radar.

"I think that's exactly it with Audi. They're not a mass market brand. We're never going to compete with the Doritos, and the Pepsis, and the Budweisers of the world, with slapstick humor and the silliness. And that stuff, I love it; it's all well and good. But, Audi has to do both. It has to appeal to the masses, but has to maintain its sophisticated persona. And, that's a trick for luxury brands to do. It's hard. It's hard to do both; something that wins on the Super Bowl with the mass audience, but is true to who you are. I think the Mercedes Benz [Kate Upton] teaser that they released is just a terrible embarrassment for them because they're trying to be…something that they're not. It's really, it's kind of sad."

"They're clearly trying to say, 'Hey, look at us! We belong in the Super Bowl and we can act like Doritos.' But no one wants to buy a Mercedes knowing they're acting like Doritos. You need to keep that allure of the high end premium brand, and still do something creative, provocative, and funny -- whatever your angle is. But, you got to be true to who you are in the Super Bowl. It's just that some of the rules, some of the guidelines, are less rigid. You can push it a little bit more, but you can't step outside and be somebody that you're not."

How do Super Bowl ads compare to campaigns that are otherwise run throughout the year?

"Well I think Super Bowl ads now are campaigns in and of themselves. You have to figure out your pre-Super Bowl strategy; are you releasing other content. You have to create a dialogue online. You have to use social media. You have to create content for social media. Do you do a YouTube channel? Do you launch it all on Facebook? Do you do both? You got a hashtag? We were the first to put a hashtag at the end of our Super Bowl spot two years ago to create a conversation in that regard. You know, how do you play the press angle? The traditional auto press, the USA Todays of the world. And, it's an onslaught; it's an entire campaign with other content created. And, I think that's the value of the Super Bowl. It's not just you buy a spot and you're done. You're basically creating a conversation that has a lot of people involved that lasts from several weeks before the game to several weeks after, and so there's value in that."

Is this a trend that you've seen recently, that Super Bowl ads are no longer a one-and-done campaign?

"Anybody that does the Super Bowl one-and-done is wasting an awful lot of money. It's too expensive to just play the game, hope you do well on some poll or meter, and be done. There's just way too much at stake. It's not a smart investment to approach it that way. I think very few companies do."

Has the style of Super Bowl ads influence advertising outside of the Super Bowl?

"I don't know. That's a good question. I think the Super Bowl in and of itself can be pretty predictable. There's going to be, you know, there's going to be a lot of dogs, I guarantee it. There's going to be some babies. There's going to be men being stupid. There's going to be men being too feminine and soft, who should be tougher. There's going to be slapstick; somebody is going to get hit in the nether-regions. There's going to be horses, probably Clydesdales. There's a lot of predictability, and I think that is comforting in a few ways to America; they have come to expect a kind of certain style of spot, but I think there's a huge opportunity for an advertiser to do something different, and stand out, and win people over with something different.

So, it's more than just slapstick. Do you think there has to be a "prevailing idea" behind the campaign that makes it a 'good' ad?

"Yeah, in my book. And you know we all probably judge the ads with our own value set, but I think you have to have something bigger than the *schtick.* Throwing the celebrity in the ad just because you know you're going to get more followers on Twitter is nice, but it's got to be meaningful. There's got to be an idea there. In fact, I'm interested to see, you know, instead of celebrities, and dogs, and monkeys, and talking babies -- what about good, old fashioned storytelling? A nice piece of film that tells a story that's captivating, that's interesting, that's shot well, that's casted well, that doesn't rely on the usual gimmicks -- I would love to see some more of that on the Super Bowl. Just win with the value of the idea and the storytelling of it."

Do you think a lot of agencies are starting to get that, and move away from the banal, slapstick humor?

"No. I think in a lot of creative departments the call comes to do a Super Bowl spot, and they immediately go, 'Well we have to do something extreme and crazy and gimmicky.' I just think that's still how people approach it. And, sometimes that yields great stuff, but a lot of times I think it leaves people reaching for something that isn't quite worth reaching for, or is shallow because it's a quick gimmick."

From an agency standpoint, what goes into getting an ad ready for the Super Bowl?

"Like I said, we approach it like a campaign. We have strategy specific to the Super Bowl. We work out a range of ideas. I like to have some flexibility going into the creative development to make sure we know of the absolute best thing that's suitable for the Super Bowl and yet true to Audi, in this case. And, so we approach it with a lot of discipline on the front end. What do we want? What do we want to accomplish? There are a lot of ways to measure success. It could just be impressions. You know, we've hit billions of impressions with past ads. Or, it could be the amount of buzz generated, or the activity on Facebook, or the USA Today poll, [or] did you make it on Good Morning America -- or, whatever. And, you kind of need to be clear on what you're going for, and have some discipline and rigor on the front end, and really unleash creatively on a range of ideas, and then put the rigor back in when you evaluate and debate which things have merit and which things don't. So, a lot goes in. Usually a lot of ideas I want to generate. You know with Audi, we can do a brand specific thing that's just really about the four rings, or we could do something about a particular model. The Super Bowl ad that we're running this year features the S6. Or, we could do something about a technology; we could do a Quatro thing, or a TDI clean diesel thing. So, right there, those are three different briefs, really. And sometimes we open it up. We know generally the objective we want to hit, and then we might look at from each of those angles -- product, technology, and brand -- and see what's the best story; what's the most compelling thing for the Super Bowl."

Do you have any all-time favorite Super Bowl ads, other than your own, of course?

"Off the top of my head, some things pop-in just randomly. One is the old 'Mean Joe Green' classic Coke spot from, I guess it was the 70s. I'm pretty sure that was a Super Bowl spot. That was just phenomenal and endearing commercial. The 'morning after' spot -- I forget the name of it -- that Nike did after the 'Y2K' non-event. That was just epic and wonderful…I think '1984' is a great story, but a little overrated. And, I think it was for its time and all of those things, amazing -- it's nothing short of amazing -- but I still don't count it among my favorites for some reason. And, maybe it's just because it's been so hyped over the years."

Some in the industry have suggested that Super Bowl ads are bad for the advertising industry, suggesting that it conditions people into believe that all advertising is like what Doritos typically does during the Super Bowl. That is, putting slapstick ahead of smart ads. What's your take?

"You know what I say to that? Yada, yada, yada. Only in advertising, in the industry of advertising, would you have someone in the industry complaining that the entire world sits up and takes notice of our craft. [Laughs] Give me a break. Now I don't think the industry always does itself proud because I think that sometimes we put a lot of dreck out there on the Super Bowl, [but] I'll take the eyeballs and the attention for one day a year on advertising. …We do a Super Bowl survey every year, and I don't have the numbers in front of me, but it says something like people are just as likely to talk about the ads as they are the key plays of the game the next day, or on Twitter, or during the game. So, it's a day we're elevated to pop culture status and we have to accept that, and we, as an industry, have to do our part which is to deliver the good content. But, to complain that people are paying too much attention to the Super Bowl, or its not what it's supposed to be cracked up to be, or look at our ads for the rest of the year -- you know what, we're lucky they're looking at them that one day."

ahab

I wasn't always a Venables Bell & Partners fanboy. I thought their Audi "Green Police" commercial was wonderfully entertaining, but did little to move Audi's brand forward. I felt the "environmentally friendly" angle probably one of the more minor points that drive people to buy an Audi.

But, Venables responded with a new positioning strategy, couching Audi as the "new" face of German luxury cars.

Holy crap. I stood up and cheered. And, to drive this new position, Venables released a remarkably brilliant campaign that was not only entertaining, but on-point with the brand strategy.

See my take on it here.

I recently ran across one of their ads they did for Audi called "Ahab." Again, it's hysterical, but the sell isn't lost in the comedy. It's a fantastic example of how to make an entertaining ad without placing humor above the brand. (see it at the bottom of this post)

As a side note, Venables recently created a brand strategy company called vpborange. I encourage you to check them out, if only to see a great site using parallax scrolling. And, as a personal side note, I would kill an unicorn to work for them. Yeah, that's right...a unicorn.

the $26,000 kia

In case you haven't heard, Kia has a car they want to show you. You may have seen NBA All-Star Blake Griffin jump over it in the 2011 Slam Dunk contest, or in a plethora of other places, as Kia seeks to shove its new Optima into every conceivable placement spot. For a company with a reputation for, well, uninspired styling, the redesigned Optima is a welcomed change. If you want to snag the premium edition of the car, you'll need to be prepared to fork over more than $26,000.

At the top of the market are makes like Audi, BMW, and Lexus. Kia plays a respectable role at the low end, and they do a good job of it. Budget-conscious consumers gladly sacrifice the styling of more expensive vehicles for the affordability and dependability of a Kia. For what many used cars cost, consumers could get a brand-new Kia, warranty and all.

However, it seems that Kia is no longer satisfied with the low-end of the automotive market any longer, and its rising price tag is slowly moving them into what branding guru Al Ries calls the "mushy middle" of the market.

Ries warns brands to stay away from the mushy middle, and for good reason. "As a market matures, it tends to fragment into two different markets, usually at opposite ends of the scale," says Reis. "There just isn't much action in the middle of the market." Simply put, the middle of the market is where brands go to die.

The high and low ends of a market are like black and white. Companies can easily define themselves as a luxury or discount brand. However, the middle is an amorphous gray. Defining a middle-of-the-road brand is much more difficult. For example, Walmart's brand is based built on cheap products. Target's brand is built on more expensive, higher-quality goods. Then you have Kmart, which was never able to establish a strong foothold for its brand in the middle of the market and filed for bankruptcy in 2002.

The problem with a big price tag for Kia vehicles is that it's pushing them into the danger zone. Kia has a brand — and a strong one at that — built on producing affordable, reliable vehicles. A $26,000 car does not fit into that brand image.

It's mystifying as to why Kia would want to leave its position at the low end of the market. Low-end brands can still be winners. Nobody tells Bic razors that its brand of cheap, disposable razors is a joke. They're king of the low-end market for razor blades. Kia can be the same for economical vehicles.

Sales for Kia continue to grow, and more power to them for that. They've done a lot in recent years to really improve the look and quality of their cars. Nevertheless, short-term growth is not indicative of long-term sustainability, especially when the growth comes at the expense of brand integrity. If Kia wants to remain a strong force in the automotive market, they will need to focus on dominating with economical, reliable cars and leave the high-end cars to the luxury brands.

audi v. chrysler; the two memorable car ads of super bowl 45

There were two car commercials during the 2011 Super Bowl that really stood out among the others. They were Audi’s "Release the Hounds" ad by Venables Bell & Partners, and Chrysler’s "Born of Fire" ad (presumably done by Duffey Petrosky Wieden+Kennedy).

The two commercials were unique for how differently they tried to sell their client. One used humor with a clever positioning strategy. The other used a serious tone and tried to use American tradition and nationalism. One worked. The other did not.

I wrote recently about Venables Bell’s new strategy to position Audi as the "youthful" luxury car among high-end German automakers. Without disappointment, they delivered during the Super Bowl with a comedic--but potent--shot at Mercedes. The ad’s theme, "progressive luxury," drives home the message that Mercedes is a relic of stuffy luxury vehicles, driven by posh old men with no taste (or, as the commercial insinuated, sense).



As long as Audi sticks with this positioning, they will surely close the gap in market share and begin nipping at the heels of BMW and Mercedes.

Chrysler’s two-minute ad--the longest Super Bowl commercial yet for the company--was supposed to be the kick-off for the brand’s rejuvenation attempt.

It failed, miserably.



There were so many mistakes in Chrysler’s commercial it’s hard to recount them here. From using a celebrity to sell a product, to strongly tying itself to a city that has come to symbolize American automaker’s hubris and unimaginative styling; there just wasn’t much that they did right.

Most Americans aren’t stupid. They know that the failure of American automakers is largely their own. For decades, they have made ugly cars with horrible reliability. Unlike their foreign counterparts, American automakers continued to pump-out uninspired cars on the presumption that their "American-made" hokum would sell them.

It didn’t, and one of the worst offenders is Chrysler.

Detroit is not an American symbol of hope and change. It is a symbol of failure and lack of inspiration. Tying your brand to that, no matter how hard you try to pull at the heartstrings of Americans, will not work. This is especially true when touting the product line as a luxury vehicle, when at no point has Chrysler ever been thought of as an American luxury vehicle (the brand that definitively owns that position is Cadillac).

Chrysler additionally wasted extra money hiring rapper Eminem to be featured in the commercial. Eminem’s ties to Detroit are most likely unknown except to a small minority of consumers, so his purpose is the commercial was completely lost on the audience. Additionally, celebrities rarely (if ever) move the needle on sales. And, the use of a youth-oriented rapper is definitely not going to help launch a "luxury" brand targeted to adults.

Reflecting on the commercial, I mostly remember Eminem and images of a decrepit Detroit. I don’t remember the product, much less anything that would encourage me, as a consumer, to think any differently about Chrysler than I did before.

For having two-minutes of airtime, I can’t think of a way Chrysler could have wasted it more efficiently other than just to run two solid minutes of dead air.

For a company that has yet to repay its debt to taxpayers for the bailouts it received to keep its doors open, this commercial was an insult. As a taxpaying advertising junkie, it was an abomination.

positioning audi in the german luxury car market

German cars have a lock on luxury cars. And, within that class, Mercedes and BMW are the market leaders. This presents a problem for Audi, who in recent years has done a tremendous job in "classing" up their cars to compete with the luxury offerings of its rivals.

However, hitting the number-two spot is still a long, long time down the road.

Going toe-to-toe with Mercedes and BMW is a fool's errand if Audi doesn't find a position for itself that sets its brand apart from being just another shiny, black German luxury car. Fortunately, I think they've found out how.



(Agency: Venables Bell & Partners)

In 1963, Pepsi launched its "Pepsi Generation" ad strategy that positioned its cola as the choice of a younger generation. In doing so, it positioned Coca-Cola--the market leader--as the "older" cola. For homogenous products like cola, this strategy was a good way to give Pepsi a unique identity in the cola market, while trying to dominate the younger market niche.

If Audi wants to increase its market share, it needs to do something similar. At least Venables Bell seems to get it.

"The 60-second spot takes the viewer on a fantastical journey through a mansion laden with trite symbols of antiquated, stuffy opulence, and says goodnight to the age of gluttony and old luxury, culminating in a Mercedes-Benz S-Class parked in the driveway," says Venables Bell's website.

There is a huge market for luxury cars among the young and wealthy. If Audi can position itself as the "not your grandfather's luxury car" brand, it can swiftly overtake this niche.

I hope Audi stays on this current track.

The "youthful" juxtaposition to the older brands is also much more effective than Venables Bell's last try during the 2010 Super Bowl. It was here that Venables Bell aired a 60-second spot called "Green Police," where it tried to position Audi as a luxury car with a green conscience.

It was a good attempt, but I don't believe most people shopping for a higher-end luxury car are thinking too much of the environment; at least not enough to move the needle on overall sales. So, for being one of the most entertaining commercials of that year, I doubt it did much to further Audi's market share.