The Risk Taker by Christine Birkner

CMO REPORT

The Risk Taker 16

AUGUST 8, 2016 | ADWEEK

PHOTO: FIRST LASTNAME

we Ellinghaus hates clichés. As CMO of Cadillac, his main directive is to avoid them: no ads with SUVs zooming down a mountain, or a litany of hot features. Some of Cadillac’s latest ads don’t even show a car. When your sales lag far behind your competitors, you have the freedom to do something drastic, and Ellinghaus, who joined Cadillac as marketing chief in 2014 after a stint as evp of marketing and sales at Montblanc and 15 years as a marketing exec at BMW, relishes that freedom. Once the height of cool in the 1950s and ’60s, Cadillac today is a 114-year-old underdog brand. While its sales rose 2.6 percent in 2015, the automaker remains far behind the three top-selling luxury car brands—BMW, Mercedes-Benz and Lexus— according to Automotive News. In 2015, after more than 100 years in Detroit, Cadillac left the Motor City behind to cultivate a whole new identity in New York. German-born Ellinghaus, 47, thinks it’s a mistake to try to “out German the Germans,” as he often says. That means that rather than trying to emulate the top-selling German nameplates, Ellinghaus has positioned Cadillac as a luxury auto brand

T H I S PA G E : M A R K M A N N ; P R E V I O U S PA G E : B A O N A / G E T T Y I M A G E S

CADILLAC WAS YOUR GREAT-GRANDFATHER’S RIDE—AND CMO UWE ELLINGHAUS SEES THAT AS A BIG PLUS. BUT THE LUXURY AUTOMAKER’S FASHION-FOCUSED, NEW YORK-BASED MAKEOVER IS ATTRACTING FUTURE GENERATIONS USING DECIDEDLY UNORTHODOX MARKETING TACTICS. BY CHRISTINE BIRKNER

ADWEEK | AUGUST 8, 2016

Ellinghaus at Cadillac’s Manhattan HQ. “New York is the epicenter of luxury,” he says.

CMO REPORT

ADWEEK: You’re attempting to change the way people think about Cadillac and present it as a brand that represents American luxury. How has your earlier career at Cadillac’s No. 1 competitor, BMW, and luxury brand Montblanc prepared you for that? ELLINGHAUS: At BMW, I learned that having a clearly defined archrival is a wonderful thing to unite a company.

AUGUST 8, 2016 | ADWEEK

are sitting in BMWs, Mercedes and Audis. [Millennials are] more open to think twice about Cadillac and form their own opinion than probably their parents were. It’s better territory for us. Younger generations don’t want the same brands that their parents or grandparents have. Rather than trying to win over cynical baby boomers who already walked away from Cadillac, millennials have no preconceived notions about it. Or, many millennials’ association with Cadillac might come from rap songs that reference the Escalade. How do you feel about that? I love it, because it shows that Cadillac is appealing to diverse groups of people. We’ll always be part of the music world. There are apparently more than 200 songs that reference Cadillac. I can’t think of a single song that references BMW. The Escalade is almost a brand in its own right. I actually have the fortune to steer a brand whose most expensive car has the biggest customer base, which is the case for Escalade. What are Cadillac’s biggest challenges in competing with other luxury car brands? Do you see the turnaround as a longterm project? Yes, this is something that will take a decade, easily. It took Audi 20 years before their brand gained an appreciation that was at the same level as BMW and Mercedes. I think it’ll be faster for us, in the digital age, as conversations happen much quicker. Our biggest challenge currently is that our German competitors grow because they have product entries in almost every segment of the luxury market. Our lineup is still limited. A lot of the growth that we’ll make will come with a wider product portfolio, when we cover more segments. We needed to reinvent ourselves to ensure that we didn’t fall back into “old luxury,” go against convention and clichés, and have a value proposition that motivates prospects as much as people who are loyal to the brand. If you’re a challenger, you can’t be complacent. Because we’re the underdog, we need to go further and work harder.

EXPERIENTIAL

The House Cadillac Built

The automaker’s brand-experience center features coffee, art, fashion—and yes, cars

PHOTOS: GENSLER

that’s uniquely American: entrepreneurial, fashionforward and art-focused—and now, one that calls one of the world’s most cosmopolitan cities home. Because younger drivers embrace art, fashion and culinary experiences, Ellinghaus has staffed up with individuals who have no automotive experience at all but, rather, marketers from the fashion and luxury worlds. Golf and motor sports sponsorships, which have long appealed to baby boomers, are out. Brand experience center Cadillac House—part coffee shop, part art gallery, part car showroom (see sidebar)—is in, as is Road to Table, a dinner-party series hosted by celebrities and celebrity chefs. His mission of attracting younger drivers involves reversing the game. The older consumers German luxury brands have courted in the U.S. over the last few decades are getting, well, older, Ellinghaus reasons, paving the way for the next generation to discover Cadillac. Adweek spoke with Ellinghaus at Cadillac’s SoHo headquarters in New York about how he is redefining the brand by embracing its challenger position.

dedication from my staff that I haven’t seen elsewhere. Much of Cadillac’s marketing staff has never worked on car brands. Why? The move to New York helped us attract talent that was outside of automotive, which I wanted. If you want a world-class engineer to move to Detroit, no problem. But how do you get an LVMH person who works in New York or Paris to move to Detroit? They won’t find that appealing. My desire was to have a more heterogeneous group of people than we had in Detroit. We need petro-heads, we need car people, but the industry, including us, has enough of them. What we don’t have enough of is people who know how luxury works in other industries, like I learned at Montblanc. I also have people on the team that came from unsexy industries—ones with products that aren’t as sexy as cars—because they know how customer interaction works. No matter how good the product is, if the experience falls short, it changes the entire perception of whether something is luxury or premium. Cadillac’s brand positioning focuses on young entrepreneurs. The “Dare Greatly” ads [via Publicis], for example, which debuted during the Oscars, featured millennial entrepreneurs from the tech, science and culinary worlds. How has this helped Cadillac appeal to younger drivers? Gen X and Gen Y will make up 80 percent of all new car purchases, and to reach out to younger customers, you have to have a point of view. We just teased a message that we Dare Greatly rather than put a car in the foreground, and the ads generated 9 million views on YouTube. People were interested in the stories [of the young entrepreneurs], and then they went online to learn more about the brand. No sales pressure, but of course, Cadillac is only a click away if you’re interested in a certain car. No call to action was the best call to action. It let people realize that this wasn’t your typical automotive ad, and it worked brilliantly. The critics and the cynics have a view that Cadillac is a grandfather’s car. We’ve been building a grandfather’s car for a long time, but the grandfathers of millennials

PHOTO: MARK MANN

“Not only can we take risks, we have to take risks,” says Ellinghaus.

For decades, BMW’s goal was to beat Mercedes. That really motivated people working there. When it happened and BMW became No. 1 in the luxury segment globally, everyone said, “What now?” They achieved their dream target, so they just said, “Let’s try to defend this position.” I realized that once you’re so successful, the willingness to take risks goes down. You want cars that are safe solutions, but not necessarily brave solutions. The appetite for having cars that have very distinct design, very distinctive driving characteristics was compromised by the desire to remain No. 1. Cadillac is a challenger brand. Not only can we take risks, we have to take risks— not to repeat the successful formula of BMW, but to build an alternative to a BMW, Mercedes or Audi. When I came here after being at BMW for 15 years [with Montblanc in between], many people were either hoping I’d do the same things or were scared that I would do the same things. I realized immediately that Cadillac has a completely different heritage. Cadillac is distinctly American and unique. If the German brands all go for No. 1 and can’t afford risk, I think we should be the brand that takes risks, that has designs that everybody might not like, that appeal to people because they’re different. The CT6 is a great example—we said the world doesn’t need another 7 Series or S Class. The Germans build terrific cars and always will, but they’re a little bit ubiquitous in suburbia. People always want to differentiate themselves, and it’s probably more promising territory to go after those customers. Montblanc was great because it taught me the power of intuition, that luxury purchases are very often spontaneous purchases, even one for a $50,000 watch. I learned that first, the brand needs to resonate with people, and as long as that isn’t the case, you won’t win them over with horsepower, newton metre, all the bells and whistles that the product has. Marketing in the automotive industry usually focuses on giving people arguments to buy a car rather than making the brand so irresistible and the design so appealing that people spontaneously say, “I want it.” We won’t rattle off technical details or have the universal clichés of SUVs on beaches or convertibles on curving roads. That’s a generic approach. Even though we want to double our sales in the next five years, we’ll still not be a part of this race for No. 1 globally, which gives us a greater degree of freedom to have a more perfect brand positioning and be a unique face in the crowd. Why was Cadillac’s move from Detroit to New York so crucial to the brand’s new positioning? Has it paid off so far? The move to New York was important because we needed a team that is totally Cadillac-focused and doesn’t have to deal with all four [General Motors] brands. We’re the only luxury brand in the portfolio of GM, and we have different customers [than the rest of the brands]. New York is an epicenter of luxury. You can say that of Paris and London as well, but what distinguishes New York is this mindset of don’t stand still, always reinvent. It’s a spirit I want to have in my team: Never stand still. You also see so many trends that emerge here that don’t elsewhere. New York has a contemporary, casual luxury, and this can only help us reach out to younger audiences that no longer buy a car as a status symbol but, rather, because it fits to their own lifestyle. They simply fall in love with it. This is something that New York offers unlike any other city. We said, “We need New York.” Has it worked? I have a motivation, passion and

In June 2016, Cadillac opened Cadillac House, a brandexperience center on the ground floor of the company’s New York headquarters sporting gleaming new Caddy sedans and SUVs at its center. The 12,000-square-foot space includes a Joe Coffee shop, fashion pop-up store and art gallery, and hosts events and car exhibitions through partnerships with the Council of Fashion Designers of America and art magazine Visionaire. Cadillac House is just part of the brand’s strategy to tailor experiential opportunities around the interests of consumers 18-49—namely fashion, design and travel. Says CMO Uwe Ellinghaus: “It shows people that we’re part of the fashion and design world. We’re convinced that this will positively change people’s perception of the brand. It shows that we’re walking the walk when it comes to luxury.”

ADWEEK | AUGUST 8, 2016

A sleek parade of Caddys anchors the 12,000-squarefoot space at the base of the brand’s offices in SoHo.