It’s been described as “one of the biggest corporate scandals of recent years”, forcing one of the world’s most recognisable brands to take out full-page apologies in national newspapers:
The full scale of Volkswagen’s emission scandal is yet to be seen. The news originally broke in September, when it was discovered that the German automotive giant had been fitting several models of its diesel cars with so-called “defeat devices”, pieces of software designed to cheat emissions tests, making them seem cleaner than they were. The software detected when it was being subjected to tests and would cut emissions, but when on the road, would produce nitrogen oxide at 40 times the legal limit. It’s understood that there are up to 11m cars fitted with the software, meaning a hugely costly recall of vehicles across the globe. Volkswagen has set aside €6.5bn ($7.4bn; £4.8bn) to cover the issue, but costs could continue to rise. CEO Martin Winterkorn resigned his post, while other executives were suspended. Shares in the company plummeted after the revelations, and are still down 20% on where they were before the news broke.
It’s hard to imagine a bigger PR disaster for the company. Misleading consumers and regulators, disregard for environmental concerns, being forced to issue an enormous recall – it’s enough to make any company wish it could hide away until the story was off the front pages, and people had moved on to other things.
In terms of marketing, that looks exactly like what Volkswagen have done. Using data from Adthena, we can see the share of voice that competing car manufacturers and retailers have had over the past month:
Towards the end of September, Volkswagen’s steady share of voice, usually between 10% and 15% of the overall market, simply disappears, as though its PPC campaigns were completely switched off. As it drops out of the market, many of its rivals see the benefit, with a corresponding rise in their own share of voice. It shows the difficult position that a company going through a PR crisis is put in – knowing that it will be the subject of many searches, placing a positive ad at the top of the SERP boasting of discounts, safety ratings and fuel efficiency, could be seen as lacking the contrition that companies are expected to show in these situations. For Volkswagen, it’s perhaps easiest just to turn off its campaigns altogether, rather than risk trading on its damaged brand name.
It’s gives competitors a chance to exploit their own share of voice boost, while affiliates and others might seek to make the most of the reduced CPC on the brand terms themselves. With the second-hand car market set to be impacted by the scandal, (http://www.mirror.co.uk/money/volkswagen-cheat-switch-scandal-drags-6553890), dealerships might need all the exposure they can get…