The review of lead creative duties on Arby’s’ advertising account comes as the chain seeks to raise its national profile, in part through a shift in television ad buying patterns.
After years of relying primarily on spot media buys, this year the chain has bought national network time on programs such as NBC’s Saturday Night Live. In the first half of 2010, Arby’s’ network TV spend totaled nearly $8 million, up significantly from about $320,000 in the same period last year, according to Nielsen. Spot TV buying in the same time frame slid 41 percent to $33 million, per Nielsen. All media spending on the brand — excluding online — totaled nearly $130 million last year and $50 million in the first half of this year.
The shift toward national buys is expected to continue with the ads from Arby’s next lead creative agency. The Atlanta-based chain, part of Wendy’s/Arby’s Group, hopes to conclude its review in November. The incumbent, Omnicom Group’s Merkley + Partners in New York, is not defending.
Based on replies to a request for proposals, Arby’s will select a handful of finalists to pitch its account. The chain’s executives will visit the agencies the week of Oct. 18, and final presentations will take place at Arby’s’ headquarters the week of Nov. 15, according to the RFP. Account revenue is estimated at $5 million.
In a note accompanying the RFP, Bob Kraut, svp of advertising and marketing communications, provided a backdrop to the search.
“We have been deeply involved in developing a new go-to-market approach which has included a refocusing of media spending from local to national media in order to create great brand impact and media visibility,” Kraut wrote. “Additionally, work has been under way for several months studying various different positioning opportunities for the Arby’s brand. In view of this, we feel that the timing is right to work with a new agency partner who can help energize the Arby’s brand and introduce fresh strategic and creative thinking.”
In the spring, the company scrapped its five-year-old “I’m thinking Arby’s” campaign in favor of a more value-orientated approach. The earlier effort positioned Arby’s food as fresher than that of burger-orientated chains. More recent ads, in a nod to the recession, touted $1 menu offerings. On July 5, Arby’s also offered a new Junior Deluxe sandwich for free with the purchase of a beverage.
Sales and franchise revenue at the chain have fallen recently. In a three-month period ending July 4, revenue from sales and franchisees declined 10 and 2 percent, respectively, compared to a like period last year, according to a Wendy’s/Arby’s Group financial filing. The brand’s total revenue (sales + franchisee revenue) for the period was about $269 million, down 9 percent from last year, the statement indicated.
Several questions in the company’s RFP probe an agency’s experience in working across disciplines and achieving integration. In a section titled “Agency Information,” for example, Arby’s asks, “Do you often integrate advertising, public relations, interactive and in-store promotions (retail) throughout campaigns? If so, for which clients? What resources do you use?”
The four-page questionnaire also includes a section on compensation that asks about incentive-based arrangements, “unique compensation arrangements” and the definition of “fair profit.”
Key decision makers in the review include Kraut, a former vp of marketing communications at Pizza Hut who joined Arby’s in January, and chief marketing officer Steve Davis. Davis joined Arby’s in January 2009. Before that, he spent 10 years at Heineken USA, lastly as svp of marketing. Earlier in his career, he held marketing roles on Pizza Hut and Pepsi-Cola.
EBJ International Consultants in Dallas is helping to manage the search. EBJ, whose president and CEO is Gene Jacobson, is known primarily as a business consultant that specializes in negotiating compensation agreements. Other clients include Texas Instruments, Xerox, KFC and Pizza Hut.
Media planning and buying duties are not in play and remain at Interpublic Group’s Initiative in Atlanta.