Volkswagen has decided to restructure its marketing programs to help increase the efficiency of their marketing programs. As a result of the repositioning activities, Volkswagen has appointed WPP to handle its North American account. The win for WPP comes after a seven-month global agency review. WPP reportedly beat out other notable agencies like IPG, Omnicom and Publicis to win the Volkswagen account.
About the Volkswagen and WPP’s Partnership
Not a lot of information has been revealed about the Volkswagen and WPP’s partnership but some reports say that WPP formed a new entity to handle the VW account. It is said that WPP named the entity The VW Partnership. The agencies involved in the entity are Possible, David, Taxi and Geomety Global and Hogarth. In 2019, Volkswagen plans to introduce new car models and a new digital platform that will improve the customer experience. It is unclear if WPP will be part of these 2019 projects but it seems very likely as the lead agency in North America.
Volkswagen’s Restructure its Marketing Programs
Volkswagen has decided to restructure its marketing programs, the aim of this project is to increase the efficiency of their marketing programs by 30%. They want to manage their marketing programs in a leaner and more centralized way. They plan to achieve this 30% efficiency goal by reducing their network of media agencies. Previously automobile company had about 40 agencies, they now have reduced it to 3 lead agencies. Their restructuring efforts have also led to the establishment of four regional “powerhouses” and the 3 lead agencies that will be in charge of these regions. The agencies are:
- Omnicom: They will handle the Volkswagens business in South America and Europe
- Cheil: The media company will handle Volkswagen business in China
- WPP: They will handle the VW’s business in North America
The restructuring plan came after VW realized that they had spent too much money on media in the past. They decided to change that, with this new structure, they plan to increase efficiency by 30% by 2020. It will also help them to keep their marketing budget stable at 1.5 billion euro ($1.7billion). VW plans to also focus more on digital marketing. They plan to increase the digital marketing budget from 25% to more than 50% of their total marketing budget.
WPP is a communications holding company, its headquarter is in London England. They own various communications networks like Ogilvy, GroupM and so much more. They offer media, advertising, digital marketing, brand consulting and public relations services. Their notable clients include Ford, Kimberly-Clark, Shell and so much more.