Jared, Footlong Jingle and "Biggest Loser" Help Give Subway a Winning Brand

by David Goetzl, May 9, 2011, 3:23 PM

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When evaluating the top-100 most valuable global brands, it's tempting to guess how much advertising may play a role in generating a brand's worth. In the U.S., there's one brand that may be benefiting more than any other from heavy advertising: Subway.

The just-released BrandZ rankings from Millward Brown has Subway's brand value at 54th globally. The position is based on a calculation derived from interviews of more than 2 million consumers in 30 countries and financial data.

Subway's value -- different from ranking -- was up 19% in 2011.

Apple is ranked first overall this year as its value rose 84%. Yet, even though it is a heavy advertiser, its value seems to be more tied to its magical products than marketing investment.

In second place is Google, which does virtually no TV advertising, save a recent effort.

IBM, where advertising isn't likely to be a major contributor to value, is in 3rd. The same dynamic goes for fifth-place Microsoft, a brand that doesn't appear to have helped itself with significant spending, notably behind its Bing search engine.

McDonald's is an intriguing case at number four, with its brand value jumping 23% for 2011. Unlike Subway, where advertising appears to be propelling growth, marketing at McDonald's may be reinforcing the brand more than helping drive it (a feat nonetheless). A similar argument could be made for Coca-Cola, which is just outside of the top five.

Subway was not in the top 100 in 2006. (McDonald's was 11th.) Subway additionally was 9th in the fast food category five years ago.

The rankings are based on global performance and marketing from country to country varies.

Yet in the U.S., Subway's blitz featuring the inspirational weight-loss marvel Jared; guys singing about $5 footlongs; and sports stars such as the surging NBAer Blake Griffin, seem to spur a link between marketing and brand strength. Subway also has a valuable tie with NBC's "Biggest Loser," while ESPN personalities Mike & Mike constantly take calls on a "Subway Fresh Take" hotline on ESPN Radio and an ESPN2 simulcast, a small part of Subway's sports push.

At Subway, top marketing executive Tony Pace oversees the company's seemingly bottomless ad budget. Before signing potential endorsers, he also gives them a taste test of sorts, wanting to know what specific Subway sandwiches they enjoy.

Pace would be a darn good hire as an endorser himself - by a network sales team. A TV advertising evangelist, he would make an outstanding addition to ad sales marketing efforts.

Pace does have some advantages beyond Subway's spending muscle. It doesn't hurt that every American can practically throw a tennis ball and hit a Subway outlet. The company passed McDonald's a while ago with the most outlets in the U.S. and last year did it across the globe (it's in 98 countries).

There's also an eagerness to eat healthier on the go among some Americans -- "The Biggest Loser" connection probably helps there -- while $5 footlongs may have helped with belt-tightening (in more ways than one) during the recent financial downturn. Subway also spent more as media costs came down, giving it more reach for less.

"The good news is that 'The Great Recession' never existed at Subway," he told NYSportsJournalism.com last fall. "We grew right through it. As it turned out with a lot of properties and a lot of media, the pricing came down. So we continue to have more resources in the marketing space and now we can get even better value." Back to the BrandZ top-100 brands, there are examples of other companies that may be strengthening their brands with advertising - AT&T (7th place), Verizon (13) and HSBC (28) stand out.

Yet, others go against that grain, Accenture, with the 49th most-valuable brand, has the spot even as it lost Tiger Woods as an endorser. Target, a massive advertiser with compelling creative, had its brand value rise only 3%.

And Budweiser/Bud Light, with all its Super Bowl ads, had no growth in value.

Of course, any theory that advertising drives value would have countervailing evidence in Facebook, the 35th most-valuable brand that might actually hurt itself if it did any significant marketing.

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