Audi in a Spin As It Tries to Explain Agency Powwows

If officials at Volkswagen’s Audi of America hope that canceling meetings with ad agencies will quiet talk that the client is restless at McKinney + Silver and looking for a change, they may be disappointed.

The meetings, requested by Audi’s domestic marketing director, Michael Lembke, had heightened buzz that began this summer when the automaker hired an undisclosed consultant to assess staffing levels and compensation at the incumbent.

Then, when client rep Jennifer Cortez confirmed the scheduled meetings early last week, she offered the odd explanation that Lembke, who transferred from Audi’s Wolfsburg, Germany, headquarters last January, was “seeking advice about the U.S. advertising industry.”

Cortez added that Lembke, an engineer with a background in product development, was happy with work from Havas’ McKinney, which has handled the $75 million account for 10 years. “He wants to be a better marketer and understand the American marketing industry better,” said Cortez. “This is not a reflection on [McKinney + Silver].” She said the agency was aware of the meetings.

On Friday, however, the client backtracked, canceling the meetings because, Cortez said, they had generated too much negative attention. In a statement, Audi said, “Since we are not reviewing the business, we are canceling these meetings in order to clear up any misconceptions.”

The statement also noted, “If we were to be reviewing the business, we would have publicly announced this and would have many different Audi of America constituents in the room.”

Cortez said Audi sold 85,726 units in 2002, up slightly from 83,283 in 2001. She said 2003 sales are on track to be flat again. Audi sold 77,337 cars from January to September.

Audi ranks as McKinney’s largest piece of business, accounting for some 30 percent of the agency’s revenue, according to one source.

The Raleigh, N.C., shop won the account in August 1993 from DDB Needham. At the time, Audi’s U.S. sales were down to 12,000, with the car maker still reeling from the Audi 5000’s involvement in a 1987 National Highway Traffic Safety Administration investigation into “sudden unintended acceleration.” Driver error was shown to cause the problem, but Audi’s image suffered for years.

The client’s advertising focused on individual product launches until 1998, when McKinney broke its first image campaign for Audi. The current campaign, “Never follow,” positions the brand as a leader in the luxury category.

A 12-page insert that ran in 15 Condé Nast magazines last year featured celebrities including singer k.d. lang, actor John Malkovich and fashion designer Narciso Rodriguez. The idea was to pair Audi with leaders in the arts, science and entertainment.