Volkswagen's iPhone App Delivers Sales

Late last year, German auto maker Volkswagen chose to launch its new 2010 Golf GTI Mark VI model in the U.S. exclusively via an iPhone application, and found great success in doing so, according the brand’s agency, AKQA Mobile.

Speaking at an industry even in New York earlier this week, AKQA’s head of mobile Dan Rosen said the strategy resulted in a 97 percent lower cost-per-sale than what he described as a “traditional” automotive product launch. “VW launched the Golf purely over iPhone. There was no paid media at all surrounding the launch,” he said.

The application itself is essentially a VW-sponsored version of a popular driving game on the iPhone platform, called Real Racing, which retails at $4.99. The “Real Racing GTI” version is free, but focuses on the VW GTI model and features VW branding throughout. For example, users can only race in variations of the VW GTI model when selecting their car, and users are encouraged to view content detailing the features of the model.

More importantly, users are also invited to use the iPhone’s geo-location function to locate their nearest dealer, and to share their best times and scores online. That data, according to AKQA, enabled the agency to directly trace purchases of the model back to the iPhone application itself. “In terms of results, VW sold at least 175 cars to registered players of the application, and over 50 percent of those sales were to new VW customers,” said Rosen.

The car itself retails for upwards of $23,000, suggesting the application generated at least $4 million in revenue.

Although 175 sales isn’t a massive lift in itself, those are only the sales that were directly linked to interaction with the application. The overall branding effect of the app is likely to be larger, given the fact that almost 50,000 users have rated it on the AppStore, and Rosen claimed it reached number one in the download charts in 36 individual territories.

Interestingly, the app makes no mention of the VW sponsorship anywhere in the app store itself, and the relationship does not become apparent until users actually download and use it.

During a panel debate at the same event, other agency representatives also described the advantages of integrating with existing applications – rather than building from scratch. Courtney Renaud, a supervisor with Mediaedge:cia said her agency has found particular value in integrating brands with existing apps.

She said, “That way you know the audience is already there, and it risks less for the client.”