May 22, 2006 -- Business Week Cover Story

The Craziest Ad Guys In America

Inside Crispin Porter + Bogusky's wacky, ambitious plan to rekindle our love affair with Volkswagen

Remember the Volkswagen Rabbit? The boxy, fuel-efficient hatchback was launched in 1974 to replace the legendary Beetle as the company's big seller and was the first VW made in the U.S. It also became known for catching fire and breaking down, and thus became the symbol of VW's collapse in America through the 1980s. At the insistence of VW's German parent, the Rabbit name was killed in 1985, and the Westmoreland (Pa.) assembly plant was shuttered soon after.

So it was audacious indeed when Alex Bogusky, chief creative officer of Crispin Porter + Bogusky, which took over the VW advertising account last December, suggested resurrecting the Rabbit name. In a Mar. 20 meeting at the Auburn Hills (Mich.) headquarters of VW of America, with company brass and two members of its dealer council, Bogusky reasoned that the redesigned Golf launching in the U.S. this year had already been selling in Europe for two years, so auto writers probably wouldn't pay much attention to the stateside debut. "So let's change the story," offered the 42-year-old ad director before the assembled group. Nervous laughter followed. VW supervisory board Chairman Ferdinand K. Piech, known for his bad temper and for insisting that VW have global model names, was certain to disapprove. But VW's U.S. chief, Adrian M. Hallmark, bought in and took the idea to the carmaker's German headquarters in Wolfsburg on Mar. 25. Worldwide brand chief Wolfgang Bernhard said yes, and ordered new signs, photography, and press releases to be rushed for the New York International Auto Show on Apr. 12, despite whispers that Piech, already gunning for Bernhard's boss, management board Chairman Bernd Pischetsrieder, was unhappy.

Hate Mail 

Many love the Rabbit idea, but plenty hate it. That's just the kind of strong, polarized reaction Bogusky and his partners like to provoke. VW's U.S. dealer council supports the move. But consider some of the hostile reaction: Peter M. DeLorenzo, founder and publisher of influential Webzine Inc., called the decision to return to the Rabbit name "pure, unadulterated lunacy," and wrote that if U.S. VW marketing chief Kerri Martin and her agency weren't stopped, they would "destroy the brand in the U.S. once and for all." Steven Wilhite, former VW marketing chief and current global chief marketing officer at Nissan Motor Co. (NSANY ), pronounced the idea "brain-dead." Rance E. Crain, editor-in-chief of Advertising Age, editorialized that Crispin's first work for VW has been "so horrendously awful that [it] smooths the way for [VW's] quick and complete withdrawal [from the American market]." Says a habitually cool Bogusky, wearing a Kiss T-shirt and stabbing his fork in the air as he scarfed banana pancakes at Greenstreet's, a cafe near his Miami office: "I like that they are talking about the work. If they aren't talking, then your brand is dead."

Indeed, Volkswagen (VKLAY ) is trying to avoid the kind of near-death experience it had in the early 1990s, when sales sank so low that German managers seriously pondered pulling up U.S. stakes altogether. At 224,000 cars sold last year, VW is a long way from the nadir of 49,000 in 1992. But to insiders who have watched the numbers drop by 131,000 sales per year since a peak of 355,648 in 2001, this period has felt eerily like the dark days a decade ago, before the New Beetle lifted the entire brand out of quicksand. Internal research shows a lasting loss of confidence in the brand after costly, repetitive quality problems: VW's U.S. division has lost more than $1 billion in each of the past two years, and this year could be nearly as bad. On May 2, Pischetsrieder had his contract renewed for six years, but only after intense pressure by the supervisory board to deliver better results with fewer job cuts than the 20,000 he wants. "No question about it, it's a five-alarm fire," says Crispin President Jeff Hicks.

Enter Crispin Porter + Bogusky, the eccentric ad shop in Miami that's known for using viral marketing and creating nutty characters like the Subservient Chicken for Burger King Holdings Inc.'s ailing franchises. VW had been through three years of coolly received ad efforts as it juggled a failed luxury sedan (the tony Phaeton, priced at more than $75,000) and the $50,000 Touareg SUV, alongside $20,000 Golfs and Jettas. Former agency Arnold Worldwide, saddled with temporary VW ad directors before marketing chief Kerri Martin arrived, struggled to make sense of it all. A year ago, Martin got the heady title of director of brand innovation, having been the celebrated marketing whiz at MINI USA and Harley-Davidson Inc. (HDI ) Crispin worked with her at MINI to create the kind of B-school case-study advertising excitement for which VW used to be known.

As Crispin tries to douse the flames engulfing the VW brand, it has to prove that it won the VW assignment on merit, not just as Martin's pet agency. Situated 1,300 miles south of Madison Avenue's groupthink, Crispin stands apart. Whether it was running MINI Cooper hatchbacks around cities atop Ford Excursion SUVs or getting teens to dump some 1,200 faux body bags at the door of a tobacco company for an antismoking campaign, Crispin has been changing the industry's playbook. It famously helped solve Burger King's irrelevancy problem, especially with consumers aged 14-25, with the Subservient Chicken Web site, where a visitor could make a chicken do almost anything on command -- dust furniture or play air guitar.

That simple, inexpensive, wacky idea has generated a staggering 460 million-plus hits in two years and helped Burger King post its first string of positive growth quarters in a decade. The agency's relaunch of the MINI brand helped the unit of BMW surpass sales targets by 80%. Crispin's success has fueled growth in its own staff from 105 in 2000 to 438. As it transforms marketing messages into entertainment time and again, "the agency has been redefining what consumers even recognize as advertising," says rival and admirer Jeff Goodby, co-chairman of Goodby, Silverstein & Partners in San Francisco.

It's early days, but it looks as if Crispin's style of marketing is working once more. Since its ads started running, VW sales are up, dealers are enthusiastic, Internet chatter about VW is as high as it has been since the public relations bonanza around the New Beetle in 1998. Just about every aspect of Crispin's work in its first five months on the job has been covered in major media outlets. As the agency and Martin have challenged many of VW's old ways and ignored some of the company's internal political trip-wires, the brand is being talked about again around the water cooler, a must for any consumer company today that hopes to not just survive but thrive.

Web Allure 

Volkswagen, of course, has its own special place in advertising history. Two separate agencies defined themselves, and advertising as a whole, in two different decades working for VW. In the 1960s it was Doyle Dane Bernbach, which created the headlines "Think Small" and "Lemon," pioneering the use of self-deprecating humor and wit to sell cars. "It was the first time ever that people talked about ads at cocktail parties and at work," says Andrew Langer, vice-chairman of Lowe & Partners Worldwide, who worked at DDB then. In the 1990s, VW and Boston's Arnold Fortuna Lawner & Cabot, before it was Arnold Worldwide, ignited a new genre of storytelling mixed with independent rock music: the "Da Da Da" ad, playing the German song of the same title while two slackers drove around town in their Golf. "It fits your life," went the ad's voiceover, "or your complete lack thereof." Now it's Crispin's turn to make history -- or humiliate itself trying -- by taking on America's favorite advertising account for yet another comeback.

It certainly didn't take long for Crispin to get people talking again. In place of a subservient chicken, Crispin invented a German-accented, dominatrix-type blonde bombshell named Helga. She appears in ads with an effete German engineer named Wolfgang, whose message to introduce the GTI hatchback is "Unpimp Your Auto," a swipe at the over-accessorized, high-performance small Japanese cars often dubbed "rice rockets." Billboards for the GTI read "Auf Wiedersehen, sucka" and "Fast as Schnell."

Schnell, and then some. Day One on the account, Dec. 6, the agency began to perform triage on the ailing carmaker. Bogusky, a Miami native who dropped out of art school though both parents are graphic artists, met with creative director Andrew Keller, 35, and more than 40 writers, art directors, and researchers in the agency's big conference room. The brief for the GTI read: "How does GTI regain its position as the original hot hatch?" By the way, Keller told the crowd, "we have to figure this out and execute a plan in time to launch during the Winter Olympics [on] Feb. 6." That gave the team fewer than 60 days, with a Christmas holiday in the middle.

Crispin's cognitive anthropologists went to work. Two-hour in-home interviews with two dozen GTI buyers, all men 18 to 30, were done in five cities. The researchers sent the subjects an assignment in advance of visits: Make a collage with magazine pictures to illustrate how they felt about Japanese "tuner" cars, like Honda (HMC ) Civics, on which owners tack thousands of dollars in speed-enhancing and cosmetic accessories. Then cut out pictures representing the European tuner cars like GTI and BMW M cars that are accessorized at the German factories. One GTI fan contrasted cutouts of Tweety Bird and a tuner "dude" wearing a chrome dollar-sign necklace to represent the Asian tuner "posers" with images of a black wolf and Ninja warrior depicting the "more authentic and serious" Euro tuner crowd.

Crispin's researchers then asked them to write epitaphs on paper tombstones after the phrase "Here Lies the Japanese Hot Hatch," and recipes that begin with, "My perfect recipe for driving is..." One recipe reads: "One S-curve, a pinch of fishtail, two parts turbo toast, an ounce of hard rock music. Combine and bring to a boil." The strategy drawn from all this was to flog the GTI as tuned in Germany by speed-happy engineers rather than at some U.S. neighborhood retail joint.

In launching the GTI and reviving the Volkswagen brand in general, Crispin faced two challenges. First, since the debut of the New Beetle, the VW brand has become feminized, says Keller. Loyal young males who were hanging on to VW by a thread needed to be reassured. Too many men had come to view VW as a "chick's brand." Worse, women were turning away from VW because of quality issues. Second, VW loyalists had become baffled about the pricey Phaeton and Touareg and loaded Jettas with price tags topping $30,000. A decade into the popularity of small SUVs priced under $25,000, VW has none. "Affordable German engineering is a huge part of VW's DNA, and these decisions really confused customers," says Tom Birk, Crispin vice-president for research and planning.

Crispin's employee handbook says advertising is "anything that makes our clients famous." So for the GTI, Bogusky and Keller are pulling no punches. This is a car built for driving fast and having fun. And for men, that inevitably leads to a certain amount of sex, they reckoned. That led to Helga, an over-the-top parody of a German nightclubbing valkyrie. She is in ads -- and stars in VW's GTI Web site. Anyone configuring a GTI, choosing interior, wheels, engine, and the like, can take a virtual test drive with the boot-wearing siren, who comments about each driver's selections. "I see from your paddle shifters, you're ready to go." And, "I luf leather." There are some 500 variations of GTI, and Helga can talk you through them all.

Helga and Wolfgang, says Hicks, are an example of taking an audience to a place they didn't know they wanted to go. "A lot of advertisers try and mirror what the research tells them. What we do is try and make the brand part of the pop culture." Ads featuring Helga and Wolfgang ran on TV in March and April, but now enthusiasts all over the Net are downloading them. In one, engineer Wolfgang is consulting a young owner with an oversized intake port on his hood that sucks air into the engine compartment. Says Helga: "It's definitely sucking." Thanks to the Internet, VW has been fielding requests for copies of these ads from media outlets and VW clubs as far away as India.

A spike in Net chatter will go only so far. Although VW ranked third from the bottom in J.D. Power & Associates' 2005 Initial Quality Survey, it improved from the year before -- by 10% fewer glitches per 100 cars. VW's quality woes have spread around the Net as fast as Helga's double entendres. This month, says VW, it will post another big improvement, while dealers are reporting half as many warranty repairs on new models as they did in 2004.

Sexy Symbol 

Despite its hasty execution, the campaign has already achieved what Martin hoped it would. "We needed to ignite a new conversation with owners," she says. The viral dimension has worked well. For about two weeks, VW ads were the top download from video-sharing site Wolfgang and Helga have become part of the new VW story. They have sites on (NWS ), where more than 7,500 fans have signed up as Helga's "friends" and are downloading a printable life-size Helga. "Bachelor parties, maybe," quips Keller.

Can Crispin's edgy playfulness go over the line? With the suggestive content, charges of sexism have followed. TV ads for the Winter Olympics depicted young men so into their GTIs that one refused to roll up the window to shield his girlfriend's wind-blown hair and told her to stop "yackin"' so he could enjoy the engine's growl. Another refused to take his girlfriend on an errand in his GTI because her weight would slow him down. Ouch. Nissan's Wilhite says he's all for shaking up VW's message, "but I can't go along with ads that marginalize women like beer commercials often do." Suzanne Farley, a Boston education consultant and owner of a 1999 VW Passat, agrees, saying the ads "made me feel weird, like they were talking right past me." But the agency just introduced its first work for Miller Lite and junked the predictable frat-boy approach. Instead, icons like Burt Reynolds and Pittsburgh Steelers running back Jerome Bettis thoughtfully discuss "man laws," like how long to wait before dating a buddy's ex-girlfriend.

There's no doubt that Crispin and Volkswagen's Martin are out to take some risks, and that for now at least they have a long leash from management, which is doing its part to supply the right products. VW is moving fast under Pischetsrieder and Bernhard to bring out several new models in the next 20 months, including a minivan, two light SUVS, and two sports cars -- the Eos convertible and a new interpretation of the 1970s and '80s VW Scirocco -- all priced under $30,000. A pricier sedan larger than the Passat is due, too, to try to hold on to aging boomer fans. It's the fastest product proliferation in VW history, and Crispin had better get a coherent strategy to reposition the entire brand before the new models arrive. "We are on a whole new timetable for getting this brand right and will move faster than people around here thought we could," says Bernhard.

In an industry that celebrates the slogan, that magical line of ad copy that crystallizes a brand's essence, Crispin hasn't yet hit on one for VW. It did, however, kill off VW's 10-year-old "Drivers wanted" line. "A slogan or tag line is not important if the messaging is right," says Bogusky. Still, Crispin likes the VW logo so much that it came up with a gimmick in the GTI ads in which Wolfgang forms the V and W with his interlocked fingers. That's already sticking online. People selling VWs on eBay (EBAY ), for example, have turned up in pictures in their cars making the hand sign.

Crispin may offer a new slogan sometime in 2007. For now, it's giving each model its own campaign. It just re-launched the Jetta with ads that are far from funky or sexy. In an about-face from its usual humorous tack, Crispin spotlights the car's top side-impact safety ratings. And like almost everything else the agency does, even these sober-as-a-judge ads have stirred conversation. In one, two couples are chatting as they drive away from a movie house. The driver is distracted and gets creamed by an SUV in real time. The effect on the TV viewer is jolting. The ad moves from the crash to the people standing by, shaky but unharmed, looking at the crushed car. A survivor says, "Holy...," and the ad cuts to a video frame that says "Safe Happens." Requests for Jetta brochures went up 30% after the ads' debut. And dozens of newspapers and NBC's (GE ) The Today Show have reported on their jarring quality. "When [Today Show host] Matt Lauer talks for seven minutes about our ads, I know it's right," says Santa Monica (Calif.) VW dealer Mike Sullivan. GTI sales are at 20-year highs, and VW sales overall are up 20% this year since Crispin's ads began.

Work Pillows 

Everything Crispin does for a client is with an eye toward gaining media attention for the brand, which is why it insists that clients break down corporate silos separating advertising, public relations, and other units. The agency turns away clients that don't give it access to every part of a company, says Hicks. The 40-year-old ad man came to Crispin in 1995 from Chicago giant Leo Burnett Worldwide, where he worked on the Kellogg Co. (K ) account. He was recruited by Chairman Chuck Porter, now 60. (Agency founder Sam Crispin left the business in 1993.) By the time Porter arrived at CP+B in 1988, he had already set a policy to punt clients that treated the agency as an ad servant rather than as a partner. Hicks, the "suit" who oversees day-to-day business, rarely wears one and doesn't even don a necktie when meeting new or prospective clients.

Few traditional boundaries between client and agency are observed at Crispin. In its first meeting with Burger King in 2004, recalls the chain's chief marketing officer, Russ Klein, the partners pitched a plan for turning the packaging and tray liners into ad vehicles and changing the doors and parking lot signs before they ever pitched an ad idea. They even rewrote an employee handbook on their own initiative. At MINI, and now VW, the agency has been creating a line of original gear for owners. For Molson, it got the brewer to spend $1 million retooling its bottling plant to put labels on the backs of bottles for Crispin to use as an ad canvas with funny pickup lines. "Cups, beer labels, door handles are all places to make a worthwhile brand statement, not necessarily an ad," says Jim Poh, Crispin's director of creative content distribution.

Crispin President Hicks insists his shop is just doing what ad agencies did in the industry's postwar heyday. Changing names of products, even coming up with new products, are old ad agency tricks of the trade. When Hicks worked on Kellogg at Burnett, the agency was so deep into Kellogg's business that the company invited the account manager, Jim Jenness, to join the board and then made him the current chief executive. Hicks complains that since big holding companies began rolling up ad shops in the '80s and '90s, the status of agencies has fallen to that of vendor, putting monthly profits for corporate parents above their own or their clients' long-term objectives. To show how serious they are about partnerships with clients, Crispin recently struck a deal with Haggar Corp. to trade sweat in that apparel brand's turnaround for an equity stake.

As Crispin's reputation grows, it's becoming more protective of its cool take-your-skateboard-to-work culture. It sold 49% of the agency to MDC Partners Inc. (MDCA ) in 2000, but its principals retained control. One recent decision that could potentially make the souffle fall, though, is to move creative chief Bogusky, Keller, and some 70 other staff to Boulder, Colo., next year. For one thing, the Miami office space itself helps foster a creative culture. It features unfinished concrete walls and floors, with interior offices that, covered with corrugated metal, look like merchant stalls in a bazaar. A large amphitheater-like public space with pillows, mattresses, and wireless links draws staffers together for improvisational meetings or breaks. Skateboards, bikes, and Rollerblades are favorite means of transport from meeting to meeting. With so many key creative staffers 2,000 miles away, the agency's ecosystem could unravel.

But Bogusky is weary of spending a third of his year in Los Angeles in various stages of ad production, separated from his family in Florida and talking to his kids via a Web cam. L.A. is only a two-hour flight from Boulder. And Miami's pricey real estate and frequent bad weather -- the office ceiling is covered in tarps because of damage from September's Hurricane Rita -- made the Rockies location seem attractive to others, too.

Before that move can spoil anything, Crispin must keep pressing the pedal to the metal at VW. A campaign for the Passat launches this month. It plays up, in part, how the Passat is for people with smaller egos and more zest for life than buyers of Acuras and BMWs. Ads for the reincarnated Rabbit are about to be shot, aimed at erasing the memory of engine fires in the 1980s. A second leg of Jetta ads scheduled for May will poke fun at conventional research showing, for example, that Jetta owners are more likely to be scuba divers or mountain climbers than owners of rival makes.

Bogusky, who grew up helping his father care for and fix British sports cars like Austin-Healeys and Sunbeams, says if there's one thing VW owners don't like, it's being pigeonholed. No wonder he and his partners can relate.

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