Cadillac turns to Minnesota to update luxury image

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: May 27, 2012 - 11:12 PM

Minneapolis ad agency sending message to younger drivers.

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The Fallon ad agency is attempting to rebrand the Cadillac image. Veda Partalo, left, Pat Fallon and Bruce Bildsten are key members of the Fallon team.

Photo: Brian Peterson, Star Tribune

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Veda Partalo didn't know a Cadillac from a go-cart 15 years ago. She was a teenager from war-torn Bosnia, fresh to the United States from a refugee camp in Hungary.

Today, Partalo is a key member of a Minneapolis advertising team assigned to reinvigorate the iconic Cadillac brand. The Fallon agency, under the direction of co-founder Pat Fallon, has a strong advertising pedigree within the automotive industry, having once led ad campaigns for BMW and Porsche.

As a strategic planner, Partalo's job is to help determine what makes Cadillac owners tick and distill that insight into a message that will attract more drivers, especially younger ones.

"These were self-made men and women," she said. "They were entrepreneurial and not bogged down by a challenge."

But the challenge is daunting for Cadillac -- Fallon's largest account. General Motors needs to shed Cadillac's old-man, car-as-big-as-a-boat image if it wants to challenge the likes of BMW, Mercedes Benz and Audi. Once the symbol of luxury driving in the United States, Cadillac has seen its sales decline from a peak of 235,000 vehicles in 2005 to 152,400 in 2011. BMW, the top-selling luxury brand, sold nearly 248,000 cars in the United States last year.

GM has made a big investment to reboot the brand. Sportier Cadillac vehicles are on the production line and will hit the showroom floor within months, complementing a popular coupe-style sedan introduced in 2008 and the top-of-the-line Escalade SUV.

"We have aggressive sales goals and aggressive launch plans," said Don Butler, vice president of marketing for General Motors' Cadillac division.

The changes to the Cadillac fleet have been well-received, but perception is still a problem, said Alexander Edwards, president of Strategic Vision, a San Diego-based firm that analyzes consumer behavior.

"Even though Cadillac is on par with BMW and Mercedes," Edwards said, "that message hasn't gotten across to the luxury buyer."

To deliver that message, GM turned to Fallon.

Industry veterans

When Fallon pitched its services to Cadillac two years ago, it helped that Pat Fallon and agency co-founder Fred Senn were veterans of the car business. From 1987 until 1992, the German luxury sports car Porsche was a Fallon client. From 1995 until 2005, the agency handled BMW's advertising and marketing. Fallon won a "best of the digital decade'' award for its groundbreaking BMW Films series in 2001-2002, which featured short feature films for the Internet starring Clive Owen.

It also helped that along the way Fallon became allies with Joel Ewanick, the chief marketing officer for General Motors, formerly of Porsche.

"I called and we set up a meeting," Fallon recalled. "I wasn't expecting anything, but the chemistry was so good. We knew the brand strategy in the luxury category. We didn't have to earn auto credibility or luxury credibility. All it cost us was a coach ticket to Detroit."

Winning the account was a big win for the agency, which dropped its newly acquired Chrysler account to devote resources to Cadillac. The stakes are huge, for both Fallon and Cadillac.

"We don't want good ads, we want great ads," Butler said. "It's a little tough right now, but at the end of the day, it's about sales and profits."

Senn, 69, said the agency's first assignment was to crack the Cadillac mystique among Cadillac customers. "The product had evolved faster than the image," he said.

That's where Partalo and planning director Adam Chorney enter the picture. More than 30 years younger than veterans Fallon and Senn, Partalo and Chorney set out like anthropologists to dissect the Cadillac mindset.

At Fallon headquarters, Partalo and Chorney talked like machine-shop gearheads as they discussed the ins and outs of the luxury market, including engine performance, driving stability and acceleration.

"The Cadillac brand was very powerful, but the cars themselves hadn't lived up to the image in the last decade," said Chorney, who makes weekly trips to Cadillac headquarters to confer with Fallon staff based in Detroit.

Cadillac currently finds itself in fifth place in terms of market share for the luxury car segment, trailing BMW, Mercedes, Lexus and Buick.

Its once-iconic name lost some of its luster as German engineering came to dominate the market, starting in the 1980s. Four German makes -- BMW, Mercedes, Audi and Porsche -- accounted for nearly 40 percent of luxury vehicle sales last year.

"The luxury market got crowded and Cadillac didn't move with the market as much," said Jessica Caldwell, a senior analyst with Edmunds.com, an online automotive resource. "Cadillac stayed with larger vehicles that focused on luxury while the Germans delivered luxury vehicles that were fun to drive."

Two new attractions

Cadillac's fortunes may be about to change.

Overall sales last year were up 10.5 percent, while sales of the smaller CTS model surged 24 percent. And two new models are about to debut. The high-powered XTS will go on sale at the beginning of summer. The smaller, more moderately priced (low to mid-$30,000s) ATS hits the market at the end of summer.

Both vehicles are designed to attract the BMW crowd, which is younger than the traditional 62-year-old Cadillac owner, but still affluent.

"It's about the driver and performance," Chorney said. "The ATS is a game changer."

To date, Fallon has created advertisements for the existing products and one teaser ad for the ATS that aired during the Super Bowl in February. A wave of advertising for the new models will be launched this summer in conjunction with the Summer Olympics in London.

Bruce Bildsten, a Fallon alumnus who went off on his own after a successful run with BMW, rejoined Fallon as its executive creative director when he learned the agency had secured the Cadillac account.

With BMW, Bildsten and his team broke the traditional car advertising rules by creating advertisements that were actually short movies called the BMW Films. They featured such stars as Clive Owen and Madonna and were directed by Hollywood heavyweights, including Ang Lee and John Frankenheimer.

He promises provocative work for Cadillac as well. "It'll be bold and quite ambitious," Bildsten said. "It will feel like more than advertising."

That is good news to Cadillac dealers such as Michael Stanzak, whose family has owned Edina's Key Cadillac since 1973.

"My family believes in Cadillac," Stanzak said. "We need new products. We need more opportunities for customers to buy that luxury car."

David Phelps • 612-673-7269

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