ADVERTISING SAVES

Seventeen months ago, at the time the scandal about Volkswagen's criminal fudging of emissions data broke, an article appeared in Adweek by an advertising professor entitled How Volkswagen Just Squandered 55 Years of Great Advertising.

In response to that piece I wrote a blog post entitled Volkswagen Will Be Saved By Its Advertising.

The professor wrote, "Emissions deception flushes decades of hard-earned goodwill"

I wrote, "The truth is exactly the opposite.

   If VW is to extricate itself from the mess it has gotten into, perhaps the biggest asset it has is its tradition of superior advertising.

   If this disgraceful atrocity had been perpetrated by Mazda or Fiat or Buick they'd be toast. But it's different with Volkswagen. We like Volkswagen. We like it because, over time, their advertising has made us like it...

   Advertising is business insurance...In fact, the insurance value that excellent advertising builds over time is every bit as important (as short-term sales)

   Over the next 18 months, Volkswagen is about to learn that the billions of dollars they paid for business insurance over the past half century was worth every cent."

Of course, my POV on this was way out of whack with the marketing industry. MarketingWeek had this to say...

   "The emissions scandal engulfing Volkswagen is to such a scale that the brand is unlikely to survive, at least in its current form, according to branding experts and consumer perceptions data." 

Well, the 18 months are about up and you don't think I'd be writing about this if the "branding experts" were right and I was wrong do you?

Volkswagen screwed this up beyond belief with a series of damaging revelations that never seemed to end. I'm sure there has been plenty of pain and angst along the way, and more yet to come. And yet, VW seems to be coming out of this in surprisingly good shape.

According to The Wall Street Journal this week...

   ...After having lost $1.7 billion in 2015, VW made a net profit of $5.4 billion in 2016, despite having paid fines and penalties of $25 billion.

  ...In 2016, Volkswagen surpassed Toyota as the world's largest car company.

If you're an advertiser, every now and then you need to take a step back and have a look at the big picture. There's more to the value of advertising than just last month's sales. In the abstract we call it "brand equity." In the real world it means "do people like us?"

To a large extent, your advertising is your public personality. If you're doing shitty advertising and justifying it because sales are ok, you're only getting half the value for your money.

When they were calculating their so-called ROI on advertising, do you think VW ever factored in the possibility that a history of excellent advertising might someday help them rescue their company?

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