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Fresh Thinking

March 1, 2010

Subway CMO Tony Pace relies on thematic brand messaging to get the most from his marketing budget

By Michael J. McDermott

It's not unusual for marketers to speak in sports metaphors or create marketing campaigns with sports tie-ins. That's especially true of Tony Pace, chief marketing officer at Milford, Conn.-based Subway FAFT - and for good reason. His first job after college was as a sportswriter for a New Jersey paper, and Pace's friends even credit (or blame) him for steering Charlie Weis into coaching. While undergraduates at Notre Dame, Pace and Weis auditioned for the same job at an on-campus radio station. Pace got the job, and Weis went on to pursue a career coaching football, including an ill-fated stint at his alma mater.

Pace has always loved sports. He even wrote the book Fighting Irish: The A-Z Notre Dame Football Trivia Book. And while he hasn't exactly hit pay dirt on Amazon.com, happily for Pace, and for Subway, he's had much greater success as a marketer. That's reflected in the marketing promotions he's created throughout his career.

"Tony is the real deal, the complete player, someone who can do all things remarkably well," says Bruce Nelson, a vice chairman of New York-based Omnicom Group, who worked with Pace for a decade at McCann-Erickson. "And he is able to take that breadth and depth and actually activate it."

Activation and integration are the two words that best describe Pace's approach to marketing. With Subway restaurants serving 26 million to 30 million customers a week, the chain's marketing tends to appear in a lot of different places - and target different audiences - at the same time. Pace is adamant that product placement alone does not equal integration. "We have to do things besides just having the product sit there saying ‘We are Subway and we exist,'" he explains. "At one time, that kind of approach might have been OK, but for a brand as big as Subway, we've got to go beyond that. We want the placement to deliver a message about our product that makes sense for the media being used."

Finding the right way to talk about the brand in specific settings is what marketing integration is really all about, Pace contends. "It's actually message integration, and too often that gets glossed over." While Subway talks about its brand a certain way in its advertising, the same language might not be appropriate in other venues, such as in podcasts or TV shows. "We have to be capable and agile enough to modify our message wherever it appears," he points out. "It always has to be a message about our products, but the slant can be health, indulgence, whatever best fits that environment."

Creating Brand Assets

Pace, who has been CMO at Subway for about four years, spent most of his earlier career on the agency side, where he developed the instincts and creativity he now brings to bear on the fast-food chain's behalf. Nelson credits him as the creative force behind Coca-Cola's 1994 Monsters of the Gridiron promotion, the first ever to utilize an interactive under-cap activation technique. "It launched during halftime of a Monday Night Football game," Nelson recalls, "and the response was so great it brought down the Sprint network."

At Subway, Pace understands the central role marketing plays in the intensely competitive fast-food industry. That's a challenge he finds exciting. He says Subway's position is unique because there are so many different facets to the brand: fresh, made-to-order, more healthful than other fast food. At the same time, Subway offers some sandwiches that are more indulgent. "Because there are so many different facets, we can be a brand that attracts a lot of different people," Pace says.

However, trying to tailor messages for multiple audiences can be an expensive proposition from a marketing perspective. Pace's solution is to treat marketing communications as a creator of assets for the brand rather than of expenses. "If I create a certain way of talking about Subway, maybe I can come back to that again and again and again, even though the execution might not be exactly the same," he says.

Subway now has several marcom "templates" in its arsenal, such as its Fresh Fit messaging, the pairing of "everyman" spokesman Jared Fogle with various athletes and other "famous fans," and the $5 Footlong sub. Pace cites the $5 Footlong campaign as an example of his approach's potency. "What was originally intended as a four-week promotion ended up lasting two years, so far, and becoming a $4 billion brand," he says. "We kept using a lot of the thematic messaging materials again and again. Obviously, people became very aware of the music in our commercials, but we also had certain iconic graphics that were used in and around the stores, and it became well known what those graphics meant."

The $5 Footlong campaign includes numerous components - digital, TV, print, and in-store. It's been so successful that, as a standalone brand, the $5 Footlong would now rank as one of the top 10 restaurant brands in the country. At one point, Pace says, recognition rates for the sub reached 97 percent among Americans aged 12-64 - making it more recognizable than the vice president of the United States.

Taking the Long View

Subway likes to create marcom assets that will have a long trajectory rather than a limited marketing window. "By taking that approach, we don't necessarily have to put the same amount of media or other muscle behind it to get people to recognize what we're talking about," Pace says. "You're getting some equity from what you've done previously. That's a big difference in terms of what we're doing with our marketing at Subway."

Extending the trajectory of its marcom messages does present some challenges and risks, Pace admits. It requires more work, longer lead times, standout creativity, and, he says, "a lot of tracking to make sure what we're doing is successful."

It also requires a leap of faith. For example, the Subway brand has been integrated into the popular NBC show The Biggest Loser for several years, and Subway allows contestants and trainers to use their own words when talking about its products. Although that would scare most marketers, Pace says that as long as the message is conceptually correct, Subway is OK with the approach. "It sounds very natural, not forced," he points out, adding that Subway is also more lenient than most other marketers regarding how the brand is used in scripted shows.

Pace is almost fanatical about leveraging the value of marcom. "One of his greatest strengths is that he's a ‘program thinker,'" says Fred Bertino, president and creative director of Boston-based MMB, one of Subway's agencies. "Under Tony's leadership, we went beyond thinking about just short-term promotions to thinking about bigger strategic platforms for the Subway brand, and that has really driven the business in an exponential way. Seeing those kinds of opportunities in their seminal state and then making the most of them, that's where Tony is really valuable."

Those who know and work with Pace describe him as plainspoken and down-toearth, but those qualities mask a formidable marketing mind. "He's a real Renaissance man in many ways," Bertino says, "a voracious reader, good sense of humor, and he probably knows more about sports than most sportswriters."

It's not surprising that when Pace is asked to sum up his thoughts about marketing integration and the challenge of finding new ways to connect with customers in an increasingly fragmented, multi-channel environment, he does it in a single sentence. "At the end of the day," he says, "you need to be in a lot of places, and you need to be smart in those places but still be true to the brand."

(Sidebar)

Food for Thought

6 best practices from Tony Pace

1. Always view marketing as an investment. If you build marketing assets, the cost of future programs will be less because your audience will have some familiarity with who you are and what you represent. "Disposable marketing," which fails to make use of previously created assets, is more expensive in both the short and long term.

2. The message matters. Simply having a product or logo is rarely enough to drive brand comprehension or consumer behavior. What simple message do you want to get across?

3. Find your brand's voice. It's not just what you say, it's how you say it. Consumers and other audiences expect brands to communicate "in character." You can modify the character gradually, but it takes time.

4. "Me too" marketing can hurt you. There may be times when a brand needs to follow a competitor's lead, but that sends a message that your brand is not a leader. Consumers will notice.

5. Marketing needs R&D too. New channels of communication are emerging and evolving right before our eyes. Which will provide a great ROI? How should a brand's message be presented within these new channels? You won't know unless you test them. Set aside a portion of your budget for marketing R&D. Otherwise, you may always be a couple of steps behind.

6. Differentiate. It not only helps you focus on what separates your brand, but also helps you stand out. Even if you have seeming product parity, you can create perceptual differentiation.

Source

"Fresh Thinking." Michael J. McDermott. ANA Magazine, March 2010.

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