Panera Bread is investing $40 million in its first major television campaign that is deliberately understated in the way it portrays the fast-growing bakery-café brand.
Nevertheless, one chain official says Panera’s first big TV campaign has been designed to add thrust to the concept’s already steady sales growth.
In a 30-second commercial that began airing Monday, Panera’s founder, Ron Shaich, sits in a local store with real Panera employees and explains how the chain’s focus on fresh bread and ingredients makes the brand “a place with a soul.”
Panera chief marketing officer Michael Simon, in an interview with Forbes, said the new “Make Today Better” campaign is meant to “elevate Panera from a brand customers prefer to one customers love.”
The commercial, created by Panera’s agency Mullen, is running in 30 markets.
VIDEO: "Make Today Better" commercial:
Simon said Panera currently spends far less on marketing and advertising — only about 1.5 percent of gross revenues — than its competitors and has invested more of its capital into differentiating its products and brand experience during the past few years of recession.
But the chain saw an opening for TV advertising and went for it, he said.
“Beyond being smarter marketers that now feel our approach and message is on-strategy, we see an opportunity as other restaurant brands spotlight two-for-$20 deals, dollar menus, etc., to tell people who we are and be heard even on a modest spend, without the noise of competitors doing the same,” Simon told Forbes.
“We’ve been one of the best-performing restaurant companies during the recession,” he said. “We think marketing will add tailwind toward ensuring that position into the future.”
While Simon also said, “Panera’s history is one of zigging when others zag,” the brand’s commercial evokes authenticity cues and messaging that already are working well for several restaurant companies.
Fast-casual competitor Chipotle Mexican Grill, for example, does not advertise on TV but touts its food quality on the radio and billboards with the “Food with Integrity” campaign.
In the pizza segment, Domino’s made an advertising breakthrough last year with its executives starring in “Pizza Turnaround” commercials, while Papa John’s founder John Schnatter has been the chain’s spokesman for its “better ingredients, better pizza” positioning for years.
Earlier this year, Culver’s Butterburgers and Frozen Custard chief executive Craig Culver began appearing in the chain’s “Welcome to Delicious” commercials, going around to different farms in Wisconsin that supply the brand’s ingredients.
Dan Dahlen, managing director of Columbus, Ohio-based Restaurant Marketing Team, said brand-building advertising like Panera’s first big commercial will increase awareness. However, he said, the chain may not need to boost its profile since it’s already one of the biggest fast-casual chains in the nation and built its reputation on positive word-of-mouth. Messages need to be more focused on specific products or offers to actually drive traffic and sales, he said.
“It makes sense that when a brand launches its TV advertising and thinks about what it should say, it’s initially trying to establish what makes Panera different and better,” Dahlen said. “What they’ll find in terms of return on investment, though, is that the ads don’t translate to trial unless you connect those dots for consumers.”
Dahlen said Panera's marketing investment could get a larger return if the brand developed product-driven ads to complement the initial branding spots. “[If] I've been to Panera personally three times this week, give me another reason to go a fourth," he said.
Still, he said, increases in advertising spending from a company the size of Panera, which generated $1.54 billion in sales in fiscal 2010, are sure to augment marketing efforts that previously had relied heavily on word-of-mouth.
“There’s no better way to drive same-store traffic and sales than advertising on TV,” Dahlen said. “With more money being put into TV than ever before, it’s still the name of the game.”
St. Louis-based Panera operates or franchises 1,467 bakery-cafes under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Café brand names.
Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN