No apologies from Cadillac CMO
Uwe Ellinghaus says he is taking on Tesla, defends 'Poolside' ad
Ellinghaus: "Tesla teaches us a message."
NEW YORK -- Uwe Ellinghaus, the German-born chief marketing officer for Cadillac, isn’t to be confused with one of those Europeans parodied in the controversial “Poolside” commercial that divided the political left and right.
The gangly 45-year-old is refreshingly self-deprecating. His first name is pronounced “Ooo-vuh” -- but he doesn’t bother to correct Americans who pronounce it “Ooo-vey.” When he pops into Starbucks he tells baristas to call him “Greg” or “Steve.”
But he’s unapologetic about pushing four-wheeled symbols of affluence. And the former BMW marketing executive is about to deliver a wake-up call to American sports executives by undertaking a line-by-line assessment of every nickel Cadillac spends on sports marketing.
That’s the kind of attitude he’ll need to carry out his brief. According to Cadillac boss Bob Ferguson, Ellinghaus is charged with creating a consistent brand strategy for Cadillac around the world -- rather than the localized efforts that have produced mixed results in U.S., China, Russia, Middle East and Canada.
He has his work cut out for him given recent sales numbers. Cadillac’s May sales rose 6 percent from a year earlier -- but dropped 2 percent for the first five months of 2014, according to the Automotive News Data Center. The company blames the rough winter for part of the decline. And there’s also been plenty of executive turnover at Cadillac recently.
U.S. sales chief Bill Peffer left in mid-June. He was the third U.S. sales chief in the last two years.
In contrast, BMW’s sales increased 17 percent in May and 12 percent during the first five months of 2014. Mercedes’ sales rose 9 percent and 8 percent respectively. Former luxury leader Lexus is also making a comeback. Sales at the Toyota-owned brand jumped 21 percent in May and 19 percent through the first five months of the year.
With 182,543 vehicles sold, Cadillac ranked as the fourth-best-selling luxury brand in 2013, behind Mercedes (312,528), BMW (309,280) and Lexus (273,847).
Outside the U.S., China is Cadillac’s biggest market by far, with sales shooting up 67% to 50,000 vehicles in 2013. That’s one-quarter of all global volume. The automaker hopes to double its Chinese sales within a few years.
“Uwe is passionate on brand building and energized at the opportunity Cadillac presents as a brand globally,” said Ferguson, GM’s former chief lobbyist, who is spending most of his time in Washington these days, where he’s deeply involved in GM’s handling of the ignition-switch recall.
Passionate debate seems to be a hallmark of Ellinghaus. He served as a senior executive at BMW’s world headquarters in Munich from 1998 to 2012. During his last three years, he served as CMO, overseeing brand strategy for the BMW, Mini and Rolls-Royce brands.
He was working in brand strategy when BMW made the decision to sell the Rover Group, but keep -- and relaunch -- Mini. “I strongly supported this because it was evident that there was growing demand for a better-looking and better-driving small car that, prior to Mini, did not exist.”
And then he went to Montblanc. Yes, the pen maker.
“I wanted, and want, to make a difference. I noticed that BMW would be as successful without me as the CMO as they were with me in that role,” Ellinghaus said. “Much of the brand-building work had been done long before.”
But the stint lasted only about a year.
“I left Montblanc because of a disagreement about the strategy between a new CEO coming in and me. … This occurred at the same time I was asked if I was interested in returning to automotive,” he said. “As much as I enjoyed Montblanc, a car remains a car, the highest high-involvement product imaginable. My only requirement was: It must be a passion-brand. Which I got.”
At Cadillac, he’s competing against his former employer. And he likes to portray his new brand as the underdog. “My view is: We are tiny little Cadillac. If we can’t outspend them, we need to outsmart them,” he said.
Big ad spender
In reality, Cadillac is far from the little guy -- in the U.S., at any rate. It may be ranked fourth in luxury sales, but it’s second only to Mercedes in spending. Last year, Cadillac spent $279.8 million on U.S. measured media, according Kantar Media, while Mercedes spent $323.1 million. Acura was third at $170.1 million, and BMW spent $142.1 million.
But where Cadillac’s ad dollars should go, along with the marketer’s other outlays, is up for debate.
Already, Ellinghaus is breaking from luxury-auto-marketing tradition in the U.S. by questioning why Cadillac should sponsor white-shoe golf and tennis tournaments.
He’d rather spend Cadillac’s money on experiential marketing that actually gets Tesla, BMW or Mercedes drivers behind the wheel of his latest models than photo ops at sporting events.
“I take [for] myself the liberty to reassess everything we do in sports and simply ask the question: If our competitors spend 20-40-50-times as much as we do, is it wise to go there just to show we are in their league? Isn’t experiential a better opportunity? To surprise people positively about Cadillac’s presence? Nobody is surprised if you come to a golf tournament and see a luxury-car brand advertising there. It’s exactly what you expect.”
That doesn’t mean he’s walking away from Cadillac’s title sponsorship of its annual golf tournament or other sports commitments. The brand’s title sponsorship of the WGC-Cadillac Champion golf tournament, for example, runs through 2016, according to spokesman David Caldwell. But it does mean automatic renewals are no longer a given.
Brand is 'strong enough'
And while the Escalade SUV has long been popular among athletes, actors and rappers as a symbol of success, Ellinghaus isn’t ready to reach into the wallet and pay them to be spokespeople. “The brand is strong enough that it doesn’t need to borrow competence from anybody famous. So I’m not interested in celebrity and advertising—whatsoever.”
He’d rather try to break through with a product-driven message for new models like the ELR plug-in electric hybrid, Caddy’s first vehicle with an electric drive-train.
Despite having said that “tree-huggers don’t buy luxury cars, anyway,” this isn’t his first time around with electric. While at BMW, he was one of the internal champions for electric cars under the BMW brand. Instead of cannibalizing sales, he argued, they would be complementary. He was long gone before BMW decided to launch its first i3 electric car, but he was on the right side of the debate.
Ellinghaus is aiming ELR squarely at Tesla, which has been succeeding through cutting-edge technology, customer word-of-mouth and fawning media coverage.
“Tesla teaches us a message: If you offer cars with an electric drive-train that have superb driving characteristics and a beautiful [interior], they find customers,” he said. “What doesn’t work is to position a car for people who are tree-huggers and green-wash an entire brand.”
Not surprisingly, the ELR is not a high-volume vehicle for the brand. It’s sold only about 300 since its launch in January at a price of $75,000.
Bill Visnic, senior editor at Edmunds.com, thinks Ellinghaus is smart to focus on the ELR. While BMW and Mercedes are just getting going with their plug-in electric cars, Cadillac has ELR in showrooms.
The BMW i3 is “not a real sexy-looking car,” said Visnic. “It’s a frumpy car. The ELR has the whole package.”
It’s a cutting-edge symbol of a forward-thinking brand, he noted. And it’s meant to get people talking.
Like that “Poolside” ad.
The 60-second spot created by ad agency Rogue showed actor Neal McDonough as a strutting Master of the Universe praising the virtues of hardworking Americans while dissing lazy Europeans who take August “off.”
Hard work vs. materialism
The spot drew praise from conservative radio host Rush Limbaugh as a rare salute to good old American hard work—and scorn from liberal critics as materialistic, jingoistic Euro-bashing.
Ellinghaus believes it was “money well spent” given the spot’s reach and efficiency.
Airing just 10 times during the Sochi Winter Olympics, Academy Awards and the WGC-Cadillac golf tournament, the spot has drawn more than 2.5 million views and counting online.
Cadillac’s decision to take a stand, for good or ill, appears to have paid off with target consumers.
Ace Metrix, which analyzes TV/video advertising, said “Poolside” scored best among men and women in the high-income ($75,000-plus) audience. The ad also scored well above the luxury-auto average for all persuasion components. It’s particularly high “Change” score indicates viewers think Cadillac is moving in a new direction, according to Dori Busell of Ace Metrix. That’s exactly what Cadillac wanted.
“Poolside” actually predated Ellinghaus, who joined Cadillac in January. Upon his arrival, he easily could have pulled the plug. Rather, the only mark he made on it was “insisting” the car shown at the end be Cadillac’s new ELR plug-in electric hybrid (the company won’t say which car was supposed to be featured).
That reluctance to storm in and tear things up to just make his mark is also good news for the ad agency, especially considering the auto category’s rep for being fickle. Cadillac conducted the search that picked Rogue (a consortium of three Interpublic Group shops) last year before he came onboard.
“I’m simply not the kind of CMO who comes in and says, ‘The first thing I do is throw the agency out.’ This has never been my style. And never will.”
Whatever you think of “Poolside,” Ellinghaus’ first big swing out of the gate got the attention of his luxury competitors. When asked what she thought of “Poolside,” Trudy Hardy, BMW of North America’s vice president of marketing, laughed and said, “Oh, boy.”
Yes, the spot got people talking. But she’s not sure about polarizing audiences.
Said Hardy: “Some would say that’s success: you got a lot of people talking about your commercial. I tend to like marketing that really brings 100% of your audience on board in a positive way. But sometimes taking that creative risk is part of the plan.”
Ellinghaus sees it a little differently. “At least it has a point of view. It is not lukewarm, mainstream communications showing a beautiful-looking car on a coastal winding road. We’ve all seen this car advertising for years. We can’t see it any longer.”
You can reach Michael McCarthy at firstname.lastname@example.org.