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Whats Cooking at Subaru?

An Interview with CMO Tim Mahoney

A Philly Ad Club Publication

When youre talking about the great brands and advertisers here in the Delaware Valley, the name Subaru has to be mentioned very early on in any serious conversation. So Im mentioning it now. Anyone strongly disagree? With over $200 million spent specifically behind the Subaru brand name just last year, this is undeniably one of the single most important consumer brands in our area. Think about it. Among the handful of major marketers around here that can match or exceed the overall total dollar amount of Subarus ample marketing budget, I believe youll find that most of them spread the wealth out over a number of different key brands. So based strictly on solo spending, Subaru happens to be one of the single largest advertised brand names coming from this area. And not to quibble with the creative axiom that money cant always buy greatness, Im guessing Subaru would qualify as one of our areas greatest brands regardless of its ad budget.

share of the national ad spotlight shining squarely on his charismatic countenance in the past year. By boldly moving the Subaru advertising account (without an agency review) from venerable Madison Avenue incumbent, DDB Worldwide, to the much smaller but highly regarded creative agency Carmichael Lynch in Minneapolis, Mahoney raised the eyebrows of some ad industry observers in the latter half of 2007. Which from my perspective makes the ad-biz buzz even a bit more fascinating here in Phillyland.

ahoney. Tim M A Driving F

than the aforementioned Carmichael Lynch? Porsche... Subaru? Are you starting to get an infinitesimal inkling yet about how significant these major motorcar marketing maneuvers are over there in Cherry Hill? Maybe we can fill in some of the blanks together. First lets look at the brand Subaru legend has it that the American company was founded in 1968 by two entrepreneurial young Philadelphians, Malcolm Bricklin and Harvey Lamm. With dreams of fame and fortune, and an initial investment of $75,000, this dynamic duo talked themselves into a sweet import deal with export-minded Fuji Heavy Industries of Japan. Shortly thereafter they introduced the first Subaru to America the Subaru 360. This was a decidedly lean, 25 horsepower, under 1000 pound automotive machine. In fact, some called it a mini-car. Zero to 50 in around 37.5 leisurely seconds. And with a sticker price of just $1,297, Malcolm and Harvey managed to sell precisely 332 of them that first year. But whos counting? In 2006, Subaru sold more than 200,000 cars here in the USA. The bottom line is that these two scrappy Philadelphians somehow turned it all around and pulled off the launch of a prosperous, pioneering car company, right outside of Philadelphia. And they did it with a company thats only about as old as the hippie movement. Henry Ford, move over. Bricklin and Lamm were smart, tenacious, resourceful, and willing to work extremely hard. They also had vision. Actually, one of my more memorable moments as a young man in the 1960s,

Driving toward Subaru of Americas Headquarters, located right across the river in nearby Cherry Hill, you really cant miss the huge sign that looms large over the highway on Route 70. There it is... SUBARU. I visually tracked the iconic corporate landmark around a jug handle, turning left and then right to enter the Subaru complex off Route 70 West. And then I noticed that other strange sign... PORSCHE. Right there, alongside the same driveway entrance into Subaru of America, larger than life, is a major Porsche dealership!

If that doesnt make Subaru interesting enough purely from a branding and spending perspective, how about the fact that its the best selling All-Wheel-Drive car in America? And I think its also fair to say that the new man firmly behind Subarus marketing plan, Senior Vice President & CMO Tim Mahoney, had a sizable

If the irony of this somehow escapes you, Im guessing you werent aware that Tim Mahoney, the man were here to meet, came to work for Subaru from a similar position at Porsche Cars North America. Hmmmm... Porsche, Subaru... Porsche, Subaru... I couldnt help but wonder if something like those two words flashed back and forth through Tims mind when HE pulled past that Porsche sign turning into Subaru for his first day on the new job. Written exclusively for Ad News by Mel Ciociola
Mel is Chairman & CEO of Ciociola Communications in Jenkintown, PA. He has built major brands worldwide from his agencys offices in the heart of Manhattan, and as one of the top Creative Officers for BBDO in NY and Chicago. Ciociola now consults with clients in the Delaware Valley on a project basis, covering everything from branding and strategy to creative and beyond. He can be reached by email: mel@ciociola.com

Oh... and did I happen to point out yet that Tims ad agency for the entire seven years he was VP of Marketing at Porsche was none other

10 phillyadclub.com - JAN/FEB 2008

g Force at
was a personal tour of the soon to be completed Subaru of America offices in Pennsauken, NJ... by none other than Malcolm Bricklin himself. My visit was all about friends and family and had nothing to do with business. So Malcolm was like a kid in the candy store, proudly darting from room to room, beaming over his construction in progress.

vivid memory. There really were beautiful Japanese gardens and a koi pondbut he never put in the junk. I saw Malcolm Bricklins old office when I worked at Subaru the first time. One of the things that makes Mahoney such an interesting CMO choice for Subaru is that this is his second time around with the automaker. He has some genuine history here. The company really knows who they hired. They specifically wanted this particular man, this individual. Furthermore, aside from working at Subaru, Tim Mahoney is no stranger to the Delaware Valley. He was born in upstate New York, but grew up in Doylestown, PA. The young man received a bachelors degree in international studies and foreign languages from Newberry College and the University of Vienna in Austria. Then, after a three-year stint in sales at Sara Lee in South Carolina, Tim came back home to Philly again and earned his MBA in Marketing Management from Drexel. Armed with a fresh-faced fascination and a bit of a flair for market research, in early 1984 Tim Mahoney crossed the bridge into New Jersey and joined Subaru of America for the first time. Harvey Lamm was still running the

dous entrepreneurial energy. You could feel it in the halls. It was small and fun, kind of like our cars were back then. Apparently he liked Subaru and Subaru liked him. He rose through the ranks quickly, holding a variety of management roles in areas including marketing, advertising, merchandising, market research, strategy and even a touch of product planning. In 1990, after Fuji Heavy Industries purchased the company back from Lamm, Mahoney became an integral member of the new management team a dedicated group with a critical mission that returned the brand to profitability. As Director of Marketing, he led Subaru through a solid repositioning around its core strength All Wheel Drive. That was Tim. Sitting there listening to him talk about what he did at Subaru the first time around, you start to get a feeling for why Porsche went after him in 1999. Porsche had started looking for bright minds to expand their storied high performance brand beyond premium sports cars. To capitalize on a then-rapidly growing hunk of the market, they had a plan to introduce their own 4-wheel drive SUV. It was the perfect time for Mr. All Wheel Drive Mahoney to meet Porsche. Shortly after shifting to Porsche in 1999, Tim did what any good automotive marketer does when he wants to feel the heartbeat of their brand. He went to a Dealers Meeting. Somehow he ended (continued on Page 60)

Heres where the reception area will be, heres where well keep spare parts, and here... this is MY office! Bricklins office-to-be was about half the size of a basketball court. Maybe bigger. Or maybe it just looked that enormous without ceilings and walls in place yet. Standing behind his seemingly gigantic imaginary desk, he gestured outside expansively through a yet to be installed wall-sized picture window. Out there Im building authentic Japanese gardens, koi ponds, and a moat with a Japanese junk. Im 100% certain

that in his mind Malcolm could visualize the whole place completed, even though it had barely just begun. Ive seen that office, Tim Mahoney said, drawing me back into the present and adding a few nifty details to my

company.

To the young, newly minted Marketing Research Analyst, those were apparently the halcyon go-go days in Cherry Hill. Tim recalls, There was a cool vibe about Subaru in the 1980s, a tremen-

This series by Mel Ciociola looks at great brands located in our Greater Philadelphia region and the big thinkers who orchestrate their advertising.

Great Advertiser Series:

Rub Shoulders. Light Sparks. 11

ey. im Mahon A Driving Force..................................... T

more than a few he came home again in 2006. Sitting in Mahoneys Cherry Hill office on a clear morning in late November, I couldnt help but notice the place was far more function than flash. Frankly, if you can compare (continued from Page 11) up sitting next to another newcomer on the team, John Colasanti, who happened to be President of the ad agency that had just been awarded the Porsche account. Talk about the luck of the draw... Tims agency partner for all this excitement was (you guessed it) Carmichael Lynch, an agency with attitude. They are what Id call a particularly interesting part of Interpublic. Porsche was C-Ls first car account... however I have also always admired and enjoyed their consistently creative work for Harley-Davidson over the years. Who with a pulse hasnt? Among Tims myriad accomplishments while Vice President of Marketing at Porsche, he led the launch of Cayenne, the brands first SUV. It was deftly defined as a Sports Utility Vehicle in the Porsche tradition, with a definitive emphasis on SPORTS. And you can safely assume it was by meticulous design that the sexy Porsche Cayenne always looked more UPSCALE than UTILITY. Between client and agency it was a savvy piece of strategic work, boldly and effectively executed with excellence. During the seven years Tim spent at Porsche, the Cayenne quickly grew from zero to hero, becoming their best selling vehicle by a long shot. Meanwhile, the folks in Cherry Hill and Tokyo were watching with great interest. One of their best and brightest alumni, a respected first generation architect of Subarus All-Wheel-Drive strategy, had helped create some new SUV branding magic. Porsche panache meets AllWheel-Drive. Subaru wanted Tim Mahoney back. And to the surprise of
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1968: The Introduction of the Subaru 360

work, and greater creative freedom. They also even took the remarkable and highly unusual step of giving me more direct influence on product. I knew, without him saying so, that was a unique honor.

The net effect is that I feel far more in charge of our destiny. You might say its like driving the car rather than just being a passenger. And Im a guy who loves to drive, especially when Im behind the wheel of a Subaru. So what did you do first when you got back here I asked? Was it deja vu or culture shock? The very first thing I did when I got

automobiles to an executive, I had fully expected Tim to be more like a Porsche than like a Subaru. But now I wasnt certain. With a full conference table for at least 8, a cozy 4 person work area, and the mans relatively neat personal desk, this office was efficiently equipped for some serious business. Classical music played softly from his sideboard in the background. No kidding. Tim Mahoney talks like a man who is very happy to be here. I actually never really intended to leave Subaru in the first place. But launching Cayenne was such a wonderful business opportunity. The experience truly enhanced my grasp on the power of branding and taught me so much about how best practices work at a great place like Porsche. Understanding market segments, targeting, pricing... Porsche is obviously the worlds most profitable car company for a reason. So I came back to Subaru with a big smile on my face and three key functional areas reporting to me, Mahoney said, counting with three fingers. Marketing, Public Relations and e-Business. Perhaps more important, top management gave me several additional areas of responsibility, more control over our

back was to watch closely for about a month or two. Very closely. Which allowed me to really focus objectively on our internal structure and the Subaru Brand. Interestingly enough, I was learning quickly that this Subaru/Porsche man was more pragmatic than visceral. Less pedal to the metal, with far more subtle substance than superfluous style. Structure is critical. You cant do anything without it. You need the right people in the right jobs to make the right things happen. Brand, on the other hand, is like your promise to the customer... if you change your promise they dont know what to believe. What did consumers believe about Subaru? I found that in the seven years I had been gone, Subaru went through 5 different tag lines. And that was on top of major creative changes every year. We

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clearly needed more commonality and harmony in our work, more branded consistency across all the models. Put a little differently, we needed the right marketing structure to energize, optimize and emphasize Subarus DNA across the board integrated in a way that the WRX can help rev interest in the Forrester, which crosses over into heightened awareness for the Outback. I had to ask how he planned to get there. By going back to basics and making technology the core of our cars. Subaru makes 100% All Wheel Drive vehicles that are safer, easier to handle, and reliable as they are durable. We bring something different to the market. Is that what makes a Subaru, a Subaru, I prodded, invoking his new tag line? Subaru is a very strong niche player that looks for places in the market where we can dominate. Our areas of strength are where Nissan and Toyota arent. We go left when they go right. By staying focused on where we want this place to go, the brand can be driven to grow intelligently. Since Mahoney returned to Subaru things seem to be going smartly in the right direction. In addition to having its best sales year ever in 2006, Subaru was recommended by Consumer Reports, it won more top safety awards than any other auto brand in the prestigious 2007 IIHS (Insurance Institute for Highway Safety) picks, launched four new models, and just a couple months ago reported its best September sales in 20 years. I knew it was almost time to wrap things upso I thought this was my last chance to gently toss in my quiet little curveball question. So ummmmm tell meexactly why did you trade in DDB for Carmichael Lynch? The new CMO paused about a nanosecond before answering; Remember what I said about structure? Everyone knows that DDB has been a great auto agency since the initial launch of Volkswagen.
Rub Shoulders. Light Sparks .61

The immortal Think Small is just one small example of their impeccable automotive pedigree. Then Mahoney smiled.

But Carmichael Lynch has been MY AGENCY since Porsche and Cayenne. After seven years together we have history, an instant shorthand, shared sensibilities, and a style of working as a team that I wanted with me right now. Thats part of the structure I believe will succeed at Subaru. I have to tell you, theres something to be said for that kind of loyal thinking in the advertising business today. Perhaps its an all-too-rare commodity. From an

agency mans perspective, it takes a special kind of client to stick with the people who got you to the dance rather than just kissing your old agency off at the door. An interesting gentleman, this Tim Mahoney. Maybe he really was more steady and reliable, like a Subaru. I wondered what Malcolm and Harvey would think about that?