Dive Brief:
- Dentsu Aegis Network, which includes Carat New York, mcgarrybowen New York, Carat Canada and DentsuBos, will take over the North American media and creative advertising business for Subway beginning in early 2018, Adweek reported. Most of Subway's ad business has previously been handled by MMB.
- The switch-up comes as the brand transitions to "becoming a modern marketing organization," Karlin Linhardt, senior VP of North American marketing, told Adweek. Dentsu won the review process in part due to its data-driven approach. Linhardt was hired in April and is part of the new North American leadership that initiated the agency review process.
- Subway used the review process to consolidate its advertising business under one group. Its previous partnerships included 17 years with WPP's MediaCom, 14 years with MMB and 10 years with Carat. Once the review was announced, MediaCom declined to participate, a spokesperson told Adweek.
Dive Insight:
Changes on the agency-side of Subway's business come amid a far larger digital transformation at the restaurant chain. In July, it launched an initiative called "Fresh Forward" that included restaurant redesigns and integrating new digital technologies into select locations such as self-order kiosks, in-store USB charging stations and Wi-Fi. The rollout additionally featured more mobile payments options from Apple and Samsung, a new mobile app and a Facebook Messenger bot for placing orders.
These upgrades are indicative of a broader shift in the quick-service restaurant space, where many players have felt a pinch as consumers start to favor healthier eating alternatives and more innovative ordering options. McDonald's is also instating changes with a strong digital flavor that echoes Subway's, such as introducing more interactive kiosks in restaurants, greater mobile ordering capabilities and a refreshed mobile app. Also like Subway, McDonald's is realigning its agency partnerships and, in late October, the burger chain put its massive $2 billion global media buying business under review.
Major agency shakeups such as this are no longer a surprise and the eye toward consolidation reflects marketers' growing desire to simplify and streamline their structures to tighten budgetary belts and, at the same time, boost results.
