Volvo: The 'safe' brand decides to take some risks

Safety-obsessed Volvo is going out on a limb with some sassy new marketing that pokes fun at its German competitors.

That new attitude was launched by Tassos Panas, 46, who became vice president of marketing and product planning for Volvo Cars of North America in January 2012. But the message will evolve more in 2014 as Volvo tries to reassert its brand identity, Panas told Automotive News.

Panas spoke with Staff Reporter Diana T. Kurylko.

Q: Your marketing budget is 25 percent bigger this year. Where did that money go?

A. The prior year we had Safe + Secure, the five-year warranty program. We elected to reallocate some resources from that program and put more into advertising. We put a lot of it into TV. We were able to buy 30 percent more in the first six months of the year. That changes a little bit in the back end of the year. We increased our digital spend; it was 13 percent of our mix last year, and this year it is 16 to 17 percent. Like most companies, we are putting more emphasis on the digital side.

I have been able to change a lot of the creative language to introduce a tone of voice consistent throughout all our channels, whether it is billboard, television or radio. It is a bit bold; it is a little bit in our competitors' faces and a bit more aggressive. We do not always have to be the shrinking violet.

We use this concept called polarity to push off from what people perceive about owners of a Mercedes or a BMW. We try to have fun and push off against some stereotypes and say that is not what Volvo people are about.

We have used some billboards like: "Built to protect things far more delicate than an ego." This major campaign started in April in L.A., Boston, Dallas and Chicago and in the second half of the year we began in Philadelphia, New York and Miami -- very big markets for us.

Another is: "The black sheep of luxury cars and proud of it." So, again, we want to be different and stand out.

Didn't you also challenge the Audi A4 on social media with the S60 sedan?

We just finished the S60 Challenge. Our dealers said when people finally come into the showroom and test drive one of our cars, they will most likely buy it. We created a program and put S60 head-to-head with an Audi A4.

The program said we are so confident in the S60, if you come in and test drive an S60 and still buy an Audi A4, we'll make your first-month payment.

It led to us to having one of our best months in May: The S60 outsold the Audi A4 for the first time since we launched: 2,739 cars, a 28.9 percent increase.

Where do you head now?

We have a new management team coming together in Sweden, a new global marketing director and a new global sales director. They are talking to us about new, interesting ways we should consider marketing the Volvo brand in the U.S. marketplace and across the globe.

From an advertising point of view we are on the smaller end of the scale relative to our larger competitors so we have to look at different ways at getting noticed. If we go head-to-head in television or radio, we will always be outspent. We need more innovative ways to get noticed.

How will you do that?

We are thinking of shifting from product-centric to being more brand-centric in our advertising. Instead of just talking about cars and what cars we sell, we want to talk about the Volvo brand itself and what makes Volvo so special and why people would consider a Volvo. We need to start rebuilding the Volvo brand value.

The second shift is moving from a purely advertising model to a storytelling model. Traditionally, we advertise around big campaigns, and then we will go quiet for a while. ... We want to move to a more organic storytelling model where we do not necessarily go away from the market but use digital and social media and consumer-relations marketing to the owner base, so we are always in the process of telling interesting stories about Volvo.

What kinds of stories?

The launch of the V60 station wagon and Vision 2020 is an interesting story. Volvo Cars has a vision that by 2020 no one will ever die in a Volvo. And they are working toward that vision by launching new safety technologies that build on each other.

Another story is our seats are fantastic. We need to talk more about our seats. In the past, it did not justify spending millions to make a television commercial to talk about seats. Now we are pursuing a model about telling little stories on an ongoing basis.

And what is your third change?

In this age of data-intensive media channels, we need to ensure we are leveraging these mediums to target not only the right demographics but prospects with the right mind-set to consider Volvo. We call them "soulful independents."

Your sales are down in a growing U.S. market. Why is that?

There are a number of reasons. We are eliminating a few models in the range: the C30 hatchback and the C70 convertible. XC90 is 11 years old and at the end of its life cycle. ... The S60 and XC60 are our volume vehicles and our newest vehicles. They are keeping up with the industry. They are up significantly. Unfortunately, this year to some degree we will have to rely on two vehicles.