Arby's Splits With Merkley & Partners, Launches Review

Chain President Promises 'Evolution of Brand Vision and Positioning'

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NEW YORK (AdAge.com) -- Fast-feeder Arby's today said it is splitting with Omnicom Group's Merkley & Partners, after a six-year relationship, and is conducting a review for a new national ad agency of record.

The move comes as Arby's is attempting to stage a turnaround as it struggles with declining same-store sales. Arby's is aligned with another fast-food restaurant, Wendy's , and together the group calls itself the third-largest quick-service chain in the country. The Arby's /Wendy's Group held a review last year for Wendy's last year that ended with creative duties on the $300 million marketing account going to Publicis Groupe's Kaplan Thaler Group.

In a statement, Arby's said it wants to have a new agency in place by year's end, and has hired an independent advertising consultancy, EBJ Consultants, to help with the search process, noting Merkley won't be participating.

"Merkley has been an important partner and member of the Arby's marketing team for six years," Bob Kraut, senior VP-advertising and brand communications, said in a statement. "We thank them for their contribution and loyalty to the Arby's brand and wish them every success."

Hala Moddelmog, president of Arby's , in a statement said: "We are deeply involved in analysis and consumer research that will result in the evolution of the Arby's brand vision and positioning," noting that "with that work nearly completed, this is a natural time to introduce fresh thinking in our brand positioning and brand messaging."

Arby's spent $100 million on measured media in 2009, according to Kantar Media. And despite speculation that the chain may have to fight harder for marketing dollars following its 2008 merger with Wendy's , marketing spending has been relatively consistent. In 2008 the brand spent $114 million, while in 2007 it spent $102 million.

For Merkley, the loss of its longtime client is a major blow, and its unclear to what degree headcount will be affected at the shop. Agency CEO Alex Gellert did not return a call seeking comment by press time. Other clients on its roster include Mercedes-Benz, Duncan Hines, Axa Equitable and Schering-Plough.

Before Merkley, Arby's spent 17 years with Doner Advertising. When it put its creative account up for review in 2004, it entertained pitches from MDC Partners' Kirshenbaum, Bond & Partners, New York; Interpublic Group of Cos.' Mullen; and Venables, Bell & Partners, San Francisco before choosing Merkley.

Arby's new shop will have a formidable challenge in trying to lure consumers back to the roast beef sandwich chain. Earlier this month, it reported a nearly $30 million dip in second-quarter revenue, from $297.5 million in 2009 to $269.6 million in 2010. Arby's North America saw system-wide same-store sales fall 7.4% in that period, while Arby's North America company-operated same-store sales declined 8.8% and North America franchise same-store sales declined 6.7%.

Wendy's /Arby's Group has about $12 billion in system-wide sales and owns or franchises some 10,000 restaurants.

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