DUBLIN Ohio Wendy’s International Inc. said Friday it would review national advertising agencies to handle its approximately $300 million marketing budget.
Chief marketing officer Ken Calwell said the review is the next phase of a “comprehensive turnaround plan” for Wendy’s, a process that began following the brand’s September 2008 merger with Arby’s parent Triarc Cos. Inc., which brought Calwell and chief executive Roland Smith aboard.
“We knew back in September that we’d be reviewing agency resources,” Calwell said, “and I’d expected it would happen sometime within the first year. We’re just a little bit ahead of our schedule. It feels like the time is right, and I feel like we’ll be a good client, too.”
Calwell said he expects several agencies to participate in the review, including current agency kirshenbaum bond + partners. Kirshenbaum bond created the chain’s “Waaaay Better” campaign that features the “3conomics” commercials for its three 99-cent sandwiches.
The first portion of the review will involve picking a lead agency for Wendy’s advertising and media planning. A second phase will focus on strategies for multicultural marketing, media buying and public relations.
Calwell said the agency review comes after a long-term brand-building process in which Wendy’s reorganized marketing team resources, changed processes for market testing and research and development, developed its new-product pipeline, and created a “brand book,” which codified all of Wendy’s brand strategy efforts.
In the first part of planning Wendy’s turnaround, Calwell said, he and Smith worked with incoming executives and franchisees to determine exactly “what the brand was and what it wasn’t.”
“Wendy’s has very big core strengths around food,” he said. “We get respect from consumers about the quality of our food, our ingredients and the way we prepare our food. That means some extra cost and extra trouble for us, but it comes down to the food. There’s an opportunity to be more focused in our advertising and operations around what our strengths really are.”
Since January 2008, kirschenbaum bond has been the lead creative agency of record for Wendy’s, and the firm’s national TV spots have promoted the chain’s “3conomics” value message and its food quality, as seen in commercials for a premium fish sandwich.
While Calwell admitted the current leadership inherited a “dry” product pipeline, Wendy’s has released a few new items recently, notably the Coffee Toffee Twisted Frosty and the Frosty-Cino. He said Wendy’s is testing a record number of menu items, both at company-owned and franchised stores. There are about 150 ideas in some form of test throughout the system, he said.
“We came in during August and September of last year, and it takes about nine months to a year and a half to have a solid pipeline developed," he said. "Well, we’re at nine months. All that fruit of our efforts is starting to show up. We’re going to have a lot of product news real quick here.”
Wendy’s domestic sales have shown some improvement of late. Systemwide same-store sales in North America rose 3.7 percent in the fourth quarter of 2008, ended last Dec. 28, and increased 1 percent in the first quarter of 2009, ended March 29. For the first quarter, domestic sales were $507 million at company-owned stores, and franchise royalties totaled $71.2 million.
Calwell said the chain’s marketing has contributed to recent sales improvement, but it’s one piece of the overall picture, along with better operations and a renewed commitment to the chain’s value proposition.
“Now as we go forward with these agencies,” he said, “we can tell them we’ve got our operations improving, we’ve got our value strategy working again, and we have a pipeline of new products. We need our advertising agency to tell our consumers about all of them.”
Contact Mark Brandau at [email protected].
