Apple of Volkswagen's eye

Volkswagen is hailing its Golf GTi iPhone application as a "first for the motoring industry". Photo / Supplied

The first signs that German carmaker Volkswagen and American computer company Apple might be setting out on a long-term relationship came at the 2007 Frankfurt motor show.

The VW Group stands - VW, Audi, Seat, Bentley, Bugatti - were littered with white Apple laptops. Staff wore white. VW's small concept car, the up! was white.

Marketing people joked that the up! was VW's version of the iPod, Apple's portable music player. They said other colours will follow when the up! goes into production, just like the iPod.

That VW chief Professor Martin Winterkorn had been talking for some time to Apple chief executive Steve Jobs was no secret. Both companies had worked together before in the United States, around the time of the launch of the iPod.

Since then Apple has launched the iPod Touch and iPhone and VW has come up with interactive racing games for the Scirocco and Polo through Apple's App Store.

Now comes VW's and Apple's most ambitious collaboration yet, the launch in the US of the sixth-generation Golf GTi - exclusively on the iPhone.

VW describes the iPhone application as a "cost-efficient approach that is a first for the motoring industry". Just how efficient is reflected in a cost comparison: In 2006, VW spent US$60 million ($83 million) on US print and television ads for the fifth-generation GTi; media analysts estimate the annual cost to VW for the sixth-generation GTi campaign on iPhone would be around US$500,000.

VW countered criticism of the iPhone-only strategy with Apple's help: Apple says there are more than 50 million iPhone and iPod touch customers worldwide. The most watched show on US television for the week ending October 18 drew 21 million viewers and commanded an average price of $130,000 for a single 30-second spot.

The carmaker's Real Racing GTi game for the iPhone and iPod Touch 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 award-winning independent digital agency AKQA, which has offices in the US, Europe and Asia.

VW licensed the GTi game from Australian developer Firemint, which built a pared-down version with fewer race tracks using only the GTi, the go-fast version of the Golf range.

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 US 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 appears to be a major factor. Of course, there is a real danger the carmaker will miss many prospects using only one narrowly targeted marketing tool.

But VW 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 search and networking application Buzzd.

VW is banking on PR, viral pass-along and some paid search for consumers looking for iPhone applications and information on the GTi.

But analysts are asking if the buzz alone will be enough for the GTi application, coming at a time when advertisers and agencies are trying to figure out how best to get their applications noticed - and downloaded - amid the more than 65,000 in the Apple App Store.

The GTi 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 GTi application popular.

Small Society's Zachary agrees, 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 VW 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.

"It's not a gamble in this case," said Zachary. "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 for the GTi in 2006 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 Mein 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 Miami-based advertising agency Crispin Porter the top cyber award at Cannes that year. Additional reporting, agencies