NEW YORK (AdAge.com) -- Volkswagen of America is launching the newest-generation GTI exclusively on an iPhone application, a cost-efficient approach the automaker said is a first for the industry.

How cost efficient? When the marketer introduced the GTI in 2006, it spent $60 million on a big-budget blitz with lots of network TV. By comparison, an executive familiar with the matter estimates the annual budget for mobile services is $500,000.

And while an iPhone-only strategy may seem limiting, consider this: In September, Apple reported there are more than 50 million iPhone and iPod touch customers worldwide. By comparison, CBS' "NCIS," the most-watched show for week ending Oct. 18, reached 21 million viewers and commands an average price of $130,000 for a single 30-second spot.

The automaker's Real Racing GTI game for the iPhone and iPod Touch in the App Store, unveiled at a press event this week in Manhattan, includes a motion-controlled car-racing game, as well as a virtual showroom. The brand conceived the mobile strategy, which also includes a six-car giveaway for game players, with independent digital agency AKQA.

Volkswagen licensed the game from Australian developer Firemint, which built a pared-down version with fewer race tracks using only GTIs, the high-performance variation of VW's Golf brand.

Not only does choosing a mobile platform over a customary 30-second spot reduce marketing cost, but licensing an existing game also means savings.

"It's a clever idea," said mobile-marketing consultant Raven Zachary, president of Small Society and founder of iPhoneDevCamp. "Licensing game technology saves VW considerable development cost and time to delivery. And the cost of six cars is not bad considering the cost of doing a print campaign or TV campaign."

Cost a focus of VW review

Cost appears to be a major factor in Volkswagen's review for its creative agency of record, according to executives familiar with the matter. Goodby, Silverstein & Partners, San Francisco and Deutsch, Los Angeles, are still in the running, after DDB and Wieden & Kennedy were eliminated earlier this week.

Of course, there is a real danger the automaker will miss many prospects using only one narrowly targeted marketing tool. But Tim Ellis, Volkwagen of America's vice president of marketing, maintains it is a highly targeted strategy to directly reach the GTI customer, a tech-savvy, social-media activist who spends time on mobile devices, most often iPhones.

"It's a home run in terms of the demo overlap," said Nihal Mehta, CEO of local-search and networking application Buzzd.

As for driving that demographic to discover and download the application, Volkswagen is banking on PR, viral pass-along and some paid search for consumers looking for iPhone applications and information on the GTI.

Coming at a time when advertisers and agencies are trying to figure out how to get their applications noticed -- and downloaded -- amid the more than 65,000 in the App Store, the question arises: Will viral be enough for the GTI application?

The game includes built-in functionality for players to send messages via Twitter and upload game play-videos to YouTube. Digital experts such as Nihal, who founded text-messaging company Ipsh and sold it to Omnicom Group in 2005, thinks these vehicles will prove more effective than paid media.

"Viral tactics work because media buys aren't that compelling anymore," he said. "You can get clicks, but even if an app is free, people don't want to download it. They really have to be invested or told by a friend."

He said he thinks the competition and incentive to play and beat other players will work to make the application popular.

Small Society's Zachary agreed, especially since the game has incentive beyond entertainment: a chance to win a new car. For consumers, more game play means more chances to win one of the six limited-edition 2010 GTI's that the Herndon, Va.-based automaker is giving away as part of the launch.

Beyond the competition, the fact that the mobile-only car launch is a first is a big draw for press, too.

'PR value'

"It's not a gamble in this case," he said. "VW is the first to do this and that's PR value. If this had been the third car giveaway through an app, maybe not. Because this is novel, [VW is] going to generate considerably more press and that will drive downloads."

Press hits aside, pitting application users against each other in competition will also translate to downloads, said Mehta, citing the popular mobile social networking service FourSquare, where users compete to be the mayor of local bars and restaurants, as a prime example.

"I don't know if a press event is going to do anything, but building in those viral elements of inviting friends having multi-player games is a good long-term strategy. People like to compete," Mehta said.

VW's launch push for the GTI in 2006 from Crispin, Porter & Bogusky, Miami, featured a dark, gremlin-like character called "Fast" who in TV spots and online urged male GTI drivers to drive faster. The other work, themed "Unpimp Mien Auto," played on VW's heritage with "Helga," a sexy, labcoat-wearing engineer with a German accent aimed at conveying to tuners of Asian cars that the GTI has built-in German engineering.

Online versions with Helga and her sidekick, Wolfgang, were wildly popular and won Crispin Porter the top cyber award at Cannes that year.

But there were insiders at VW who were concerned that the company was spending too heavily on the niche GTI model while ignoring the best-selling Jetta. Auto pundits criticized VW for having too many different messages for different models instead of an umbrella approach.

VW sold 5,558 GTIs in the first nine months of the year in the United States, 57 percent fewer than the same period a year ago, while its Jetta sales jumped by 7 percent to 81,161 cars, according to Automotive News.