How A Revolutionary Ad Campaign Helped To Turn Around Subaru

In two decades, Subaru has gone from struggling carmaker to steady success. What changed the company's fate? An ad campaign aimed at a group of consumers other automakers were ignoring.

STEVE INSKEEP, HOST:

We have the story of a revolutionary advertising campaign that helped turn around a struggling car company. The campaign helped that company build an unusually devoted following among a specific group of Americans. The automaker was Subaru, and Noel King of our Planet Money team has the story.

NOEL KING, BYLINE: Amy Knopf owns a white 2004 Subaru Impreza. It's pretty banged up, but Amy loves this car. She drove it through a snowstorm to bring her newborn daughter home from the hospital.

AMY KNOPF: I just kept looking in the rearview mirror. My wife was sitting back there with the baby, and it was a really happy scene in the back seat, but, you know, I was just full of terror.

KING: A couple of years ago, Amy got in kind of a bidding war over the Subaru. Her friend, Erika, was selling it. Amy and her wife wanted it. Another couple, a man and a woman, was offering, Amy thinks, about a hundred dollars more. But Erika sold it to Amy with one requirement - you cannot peel the human rights campaign sticker off of the back window, which - well, let me let Amy explain.

KNOPF: She sold it to us because she wanted it to go to, like, another lesbian couple.

KING: Amy's laughing because this is kind of a stereotype - that lesbians love Subarus. The car even has a nickname.

KNOPF: My friend, Erika, always called it the Lesbaru (ph).

KING: And this isn't an accident. In the early '90s, Subaru was fighting to compete with giants like Toyota and Nissan. Sales were slumping. Dealers were nervous. But there was one bright spot for Subaru - their four-wheel-drive cars. The company asked, who's buying them? Tim Mahoney headed up marketing for Subaru at the time. And one day, he was talking to his colleague, a gay man.

TIM MAHONEY: He says, yeah, all my friends that own Subarus are lesbians. And it was, like, one of those moments where everything came into focus, and it's like, oh, wow.

KING: Subaru spoke to a bunch of owners and discovered, yes, lesbians loved those four-wheel-drive Subarus - loved that they could handle all types of weather and were roomy. In the early '90s, though, most big companies didn't advertise directly to gay and lesbian consumers because they were afraid of alienating heterosexual consumers.

But Subaru took a risk and hired a tiny New York ad firm, Mulryan/Nash, that specialized in this type of work. John Nash was the creative director. He says Subaru executives wanted the ads to be subtle. And this is what made this ad campaign so memorable. In print ads, John used inside jokes that were obvious to lesbians and gays but not really to anyone else.

JOHN NASH: And at the time, there was "Xena: Warrior Princess," and the lesbians loved Lucy Lawless, and everybody loved Xena. So one of the license plates was going to be Xena lover (ph) - X-E-N-A-L-V-R. One of them was P-Towny - P-dash-Towny.

KING: For Provincetown?

NASH: For Provincetown. And the other one was, camp out.

KING: By 2000, Subaru's sales numbers were ticking up, and the company hired Martina Navratilova, the retired tennis star, as a pitch woman.

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MARTINA NAVRATILOVA: What do I know about performance?

KING: Pam Derderian is the co-founder of 15 Minutes, Inc., a marketing firm. She introduced Navratilova to Subaru.

PAM DERDERIAN: She was on mainstream television commercials promoting the cars. She was in print ads promoting the cars. She was in outdoor billboard advertising promoting the cars.

KING: A year after Subaru hired Navratilova, it had its best sales year to date. In the last 10 years, its market share has doubled. These days, a spokesman told us, Subaru ads focus on buyers' hobbies and interests, regardless of sexual orientation. But the campaign seems to have earned Subaru a loyal following. Noel King, NPR News.

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