Wednesday
Oct272010

Q&A: Would You Join A Club (Sandwich) That Has Michael Phelps, Michael Strahan, John Cena And Jared Fogle As Members?

America's most-traveled subway system is in New York, but there is something to be said about the well-traversed Subway restaurant system headquartered in Milford, Conn., whose most famous "passenger" is customer-turned-advertising star Jared Fogle. However, as CMO Tony Pace relates, like the New York subway, the QSR system has had its twists, turns and challenges in trying to align the brand with the lives of healthy and active people around the world.

By Barry Janoff, Executive Editor
(Posted October 26, 2010)



Jared Fogle is the focal point of a marketing effort supporting Subway's alliance with the ING NYC Marathon. (Photo: NYSportsJournalism)Back in 1965, Bonanza was the top-rated TV show and Fred DeLuca and Dr. Peter Buck opened in Bridgeport, Conn., what would lead to a bonanza: the first Subway restaurant. Since then, the company, later incorporated as Doctor's Associates Inc., has helped to shift the term "sub" from being defined as an underwater vessel to one that land-dwelling consumers associate with club sandwiches and other food items at more than 25,000 domestic locations and more than 33,500 shops worldwide.

Going against the grain of QSR thinking, Subway has for more than ten years sought to align its food offerings with health and fitness. That strategy coincided with the arrival of Jared Fogle, who transformed himself from a 425-pound student at Indiana University to an über-weight-loss company spokesman. With Jared in tow, Subway has extended its sports-sponsorship menu to include athletes from Nascar, WWE, the NFL, NBA, Major League and Little League Baseball, the Olympics and elsewhere.

Subway's messaging also can be seen and heard during NBC Sunday Night Football; as a primary sponsor on ESPN Radio and ESPN 2's Mike & Mike in the Morning, with Mike Greenberg and Mike Golic; and via an alliance with Sports Illustrated Kids offering reusable kid's meals bags that feature images and stickers of athletes who endorse Subway.

This year, Subway signed on as an "official training partner" for the 2010 ING NYC Marathon, with Fogle entered as a participant. Marketing includes POP featuring Fogle, support of The Jared Foundation (whose mission is  to raise awareness and funds regarding the problem of obesity among kids) and a TV spot in which three world-class marathon runners from Kenya — Andrew Musuva, Jonathan Ndambuki, and Mbarak Hussein  —  discuss the event. "[It] won't be easy this year. Jared's running. He lost 245 lbs. He's capable of anything." Their solution: Run 500 miles to eat at the nearest Subway.

'Family Guy' Peter Griffin has starred in his own Subway commercial. Can you guess his favorite sub? (If not, see the list below.)Although Jared is the person most closely associated with Subway marketing, Michael Phelps is the athlete who has arguably provided the QSR with its most widespread and controversial publicity. The man who won a record eight gold medals in swimming during the 2008 Summer Olympics in Beijing was in his rookie year as a company spokesman when the the infamous photo showing him with marijuana-related paraphernalia was published. Subway chose to retain its alliance with Phelps, but not without taking some risks and hits.

Over the past few years, Subway has had success with spokespersons from across the landscape of sports, including Reggie Bush, Nastia Liukin, Michael Strahan, Laila Ali, Ryan Howard, Carl Edwards and John Cena. What Subway boasts is that these athletes actually eat at Subway, many as part of their training regimen.

Among their favorite sandwiches:
John Cena: Double Meat (various)
Michael Crabtree: Chicken And Bacon Ranch
Carl Edwards: Oven Roasted Chicken, Black Forest Ham
Jared Fogle: Subway Club
Blake Griffin:  Oven Roasted Chicken
Peter Griffin (Family Guy): Subway Feast
Ryan Howard: Big Philly Cheese Steak with Banana Peppers
Al Jefferson: Ham and Turkey on Wheat Bread
Meb Keflezighi: Turkey Sub, Meatball Sub
Kimmie Meissner: Turkey with Cheese
Tony Parker:  Chicken and Cheese
Michael Phelps: Meatball Marinara with Jalapeños, Turkey
CC Sabathia: Big Chipotle Cheese Steak
Michael Strahan: Subway Club
Ndamukong Suh: Oven Roasted Chicken; Breakfast Subs: Bacon and Eggs or Steak and Cheese
Justin Tuck: Breakfast Sandwich Egg Whites And Spinach

Tony Pace has been svp/CMO of the Subway Franchise Advertising Fund Trust since Jauary 2006. He sat with NYSportsJournalism at a busy Subway location in midtown Manhattan to talk about how Jared, Phelps and sports have been, and will remain, integral to marketing and growth.

Tony PaceNYSportsJournalism: I like doing this interview in a Subway restaurant. Do the people working here know who you are, or is it a new reality show, Undercover CMO?
Tony Pace: [Laughs.] I'll give you my favorite story about that. Jared Fogle has kind of become an iconic figure. He is from Indianapolis and is a big Colts fan. Several years ago, the Colts were playing the New York Jets at Giants Stadium. I called him the day before the game and asked him to fly in to go with me. We were also going to do some tailgating so I went to the local Subway near my house in New Jersey and bought him a Subway Club.

When I picked him up at his hotel the next morning he asked if we could get some coffee. We found a Dunkin' Donuts at a strip mall. As he went in, I noticed a homeless guy asking for some food. I also saw a Subway at the other end of the mall. So when Jared came out I said, 'Let's get some fresh sandwiches.' It's probably 10:15 AM and the Subway just opened; there were maybe three employees there. I walked in with Jared and ordered. The employees didn't recognize Jared. They had no idea who he was. As we walked back to my car with the subs, I figured I'd offer the sub I got the day before to the homeless guy. So I said to him, 'Sir, I bought this sandwich yesterday. It's been refrigerated, it's still good and I'd like to offer it to you.' He said to me, 'I'd love to have it.' Then, without missing a beat, he asked, 'By the way — is that Jared the Subway guy?!' [Laughs.] When I went to work the next day I told everyone, 'Jared is very well known  . . . except by our employees!' [Laughs.]

NYSJ: Was he recognized when you went to the Jets game?
TP: We were literally overrun by people who wanted their picture taken with him. If you know the demographics of Jets fans, they are mainly union workers: plumbers, pipe-fitters, those types of jobs. So we had all of these huge guys saying to Jared, "Dude, I love you. But I can't eat what you eat!  We love meatball subs! But can we still take our picture with you?" [Laughs.]

NBA player Blake Griffin is among the athletes helping Jared Fogle train for the ING NYC Marathon. (Photo: Subway/Stuart Ramson)NYSJ: Subway uses different types of strategies in marketing, but sports marketing would seem to be your strong point. What was the planning behind that and what have been the specific ROIs?
TP: There are a lot of metrics that we look at. Why do we do sports? If you think about Jared, his story is primarily but not exclusively about weight loss. Weight loss is an important part of health, but it's not the only part of health. What we wanted to do was to expand the brand to be about being healthy and being active. Then, a few years back Jared was becoming more than a pitch man for us, but we felt that his commercials we not allowing him to be himself. So we started to pair him with athletes, And what that did was it added another dimension to who we were as a brand and it also allowed Jared to be more of himself.

NYSJ: How did you tie Jared into sports in a way that it would seem genuine to consumers and not just a marketing ploy?
TP: Jared is a big sports fan. His story was real. But you can recite the lines that someone else writes or you can say them as you really feel them. We were trying to get to that point. So pairing him with athletes was great for him and really allowed his personality to come out. About four years ago, we started pairing him with Michael Strahan, then wrestler John Cena. When we filmed those commercials, we had good scripts, scripts that we liked. But as Jared and Michael and Jared and John became more comfortable with each other, we let them go off the scripts. And the commercials that eventual aired were completely off-script. It didn't mean that we didn't get our message across. As a brand we aspire to be very real. We don't want to be too varnished or put on a face that is not necessarily us. So the reality of those spots was really, really good. And they made Jared more human.

"We paired Jared with Michael Strahan, John Cena. The reality of those spots was really, really good. And they made Jared more human."

NYSJ: Was there an impact on sales from those spots and, if so, how long did it take to see it?
TP: Obviously we constantly track sales. We saw that those spots immediately helped sales. And we also saw it worked in a number of other metrics that we track from a brand standpoint. It was pretty clear to us that the strategy was popular. Since then, he's also been paired with Ryan Howard, Tony Parker and others.

Nascar driver Carl Edwards is among the chain's 'Famous Fans' who has appeared in a TV commercial.NYSJ: How do you decide which athletes might work best for your marketing?
TP: We know that there are a lot of athletes who really do eat at Subway. We talk to a lot of athletes and we ask, 'Do you eat at Subway?' And a lot of them will say, 'Subway is all I eat on the road. I can't go to any of those other places because [their food] has way too much fat.' So by and large we were finding that there are a lot of pretty high-profile athletes who are regular customers and, as we like to say, fans of Subway. And that led to our campaign, 'Famous Fans.' They are all very well known and at their core they like Subway. And the way we know they are regular customers is because when we ask them, they immediately tell us their favorite sub. They give all of the details.

NYSJ: Are there a lot of athletes who want to be in Subway commercials?
TP: Let's put it this way: I'll have a gazillion people reach out to me, usually it's an agent, and they'll say, My guy or gal loves Subway. My first question is, 'What's their favorite sub?' And if they answer, "Uh . . . Uh . . . Uh . . . tuna . . .'  I'll say, 'Not so interested.' But when they can recite in detail what they eat, I'll listen. Blake Griffin of the Los Angeles Clippers told us chicken breast on wheat bread with lettuce, tomato, other toppings. All the details. That's how we know they really are real fans of Subway.

NYSJ: Does any athlete in particular stand out with his or her favorite sandwich?
TP: When I met Tony Parker of the San Antonio Spurs, I asked him about his favorite sub. He immediately said, 'It's actually something that's not on the menu — Chicken and Cheese.' And I knew he was a real fan because at that time that was also my favorite sub. So I asked him, 'Great. But how do you make it?' He said, 'I order chicken on Italian bread with American cheese.' And I replied, 'Dude! You don't mix up the cheeses?' Because when I order it I say, 'Give me one portion of cheese, but do cheddar, provolone if they have it and Swiss.' And he said, 'I didn't think of that!'

NBA All-Star Tony Parker, whose favorite sandwich is a Chicken and Cheese club, signs autographs at a San Antonio Subway location during a 2009 promotion. (Photo: Subway/Suzanne Starr)NYSJ: Some restaurants actually name their sandwiches after the celebrities who eat them? Have you considered that for Subway?
TP: Well, in today's world, every agent would then want a piece of the sales. And we would never do that. Maybe we would consider it if someone was willing to do it on a [promotional] basis.

NYSJ: Michael Phelps is among the athletes aligned with Subway. Can you talk about the relationship Subway has with him and whether or not it was risky to support him when the photo showing him using drug paraphernalia was published in 2009?
TP: Everything in life is a risk. When I write my book on marketing and advertising, that will be an interesting week to write about. Here's the story. I was down in Tampa for Super Bowl week [Super Bowl XLIII, played Feb. 1, 2009]. So around noon on the Saturday before the game I got a phone call from Michael's agent, Peter Carlisle [at Octagon]. He said, 'I have to alert you to a problem.' He told me what was going on, that the photo was coming out in a newspaper that night in the U.K. First I asked him to keep us apprised of what was going on. Then I asked him all the hard questions you would expect me to ask an agent. He answered as best as he could.

NYSJ: What did you do after you heard the news?
TP: NBC was televising the Super Bowl that year, and they also had televised the 2008 Summer Olympics. Given the importance of the Olympics to the NBC brand, Phelps is very important to them. (Editor's note: NBC will also telecast the 2012 Olympics in which Phelps will compete.) NBC was hosting a big meeting in Tampa with all their advertisers at which they were showing a lot of their program developments. Kind of an early up front marketing meeting. After speaking with Peter, I was heading to that meeting and ran into some of the folks I knew from NBC. Jeff Zucker [at the time president/CEO for NBC Universal] saw me and said, 'You look kind of down.' And I replied, 'Did you hear the news about Phelps?' He didn't know what had happened. So I said to him, 'Well, in about an hour something big is about to hit the news.' And I could see the veins bursting out of his neck. "What is it? You've got to tell me!' So I said, 'Here's what it is . . . ' And his first reply was, 'Oh, no.' Frankly, his concern was no surprise.

NYSJ: What was the reaction at Subway when the photo came out?
TP: A lot of stuff happened that week. I was particularly disappointed that other brands involved with Michael felt compelled to say they were dropping him. Like Kellogg. Which was B.S. because their deal with him was done anyway. But other brands came out supporting him [including Speedo and Omega]. So all week people were telling us that we had to come out with a statement. And my reply was, 'Why do we have to make a statement? There's no reason to make a statement.'

Subway supported Michael Phelps during and after his controversy, and he remains a spokesperson.NYSJ: What led to the statement that you did make?
TP: We were tracking how consumers were responding. I actually had drafted a note that we could use if we had to. At the end of the week I got on a plane to come back from a franchisee meeting in Miami. When I landed at LaGuardia Airport [in New York], I turned on my Blackberry. I had a gazillion messages because ESPN was saying that Subway had dropped Michael Phelps. Which was not true. So I said to our PR guys, 'The ESPN story is not true. Send out the statement.' And I can still come close to reciting it: 'Like most Americans, and like Michael Phelps himself, we were disappointed in his behavior. Also, like most Americans, we tend to forgive and look forward to working with him in the future.'

NYSJ: Did it have the intended effect?
TP: That basically stopped the whole thing [with regards to misinformation about Subway's position]. I called the ESPN guys and was really ticked off that they hadn't checked with us before [running the wrong information].

NYSJ: Weren't there also reports that Subway had delayed airing new spots with Phelps?
TP: That's the thing that everybody got wrong. We shot commercials with him in December [2008], and the intention all along was to run those commercials in the summer [2009] when he was swimming. If you are a marketer, do you run baseball ads in February? Well, maybe if you are gearing up for the next season. But that really was not in line with what was going on [with Phelp's swimming schedule]. We were having on-going discussions with Peter on how we would work with him and Michael.

NYSJ: When you look back, do you still feel you made the right call on how you handled the Phelps situation?
TP: Certainly. He's still iconic. His ratings are still very high. There was definitely a dip in March-April of 2009, But it came back up.

"Our approach to working with Michael is pretty well defined. We are a brand that's all about training. We're looking for when they really do the hard work."

NYSJ: Do you foresee using Phelps more in marketing as the 2012 Summer Games in London get closer?
TP: [Smiles.] I'm not going to let all our plans out.

NYSJ: Did the situation with Phelps change the relationship?
TP: Our approach to working with Michael is pretty well defined. And our way of working with Michael, as with most athletes, is different than everybody else. Lots of people, when they work with athletes of Michael's calibre, will say, 'We'll work with him for 17 days every four years.' We are a brand that's all about training. Not as many people watched Michael in the pool in Rome in 2009 [at the World Championships, where he won five gold medals], as watched him at the Olympics, but he had a great race. So we're not just looking at when the spotlight is the highest. We're looking for when they really do the hard work.

Subway's sports alliances include a partnership with 'Sports Illustrated Kids' featuring reusable bags with images of athletes and collectible stickers.NYSJ: Given recent history with Phelps, Tiger Woods and others, how do you know who to sign to an endorsement deal?
TP: You have to be careful. But I don't think people expect human behavior to be perfect. On the other hand, I don't think we have the right to tell people how to behave. But they have to be people who have good judgment and don't have a pattern of bad behavior. When dealing with celebrities and athletes, you can make a lot of wrong judgments.
 
NYSJ: Do you see the same type of thing happening with Michael Vick or Ben Roethlisberger that happened with Phelps, where marketers might come back to them after a certain amount of time has passed?
TP: It's different for each athlete. The questions are, What was the behavior? Is it forgivable behavior? Everyone has to make their own judgments. I certainly have my own. Michael Phelps is someone who was on a rigorous training regimen, and got away from that regimen. His behavior had much more of an impact his life versus impacting other people. There are different levels of action and behavior.

NYSJ: Do you anticipate as the 2012 Summer Games in London get closer that Phelps again will be in the marketing spotlight and that his name will still be attached to the controversy?
TP: Knowing him and his agent, he will be in the spotlight. The public awareness of Phelps is so high even during years when the Olympics are not played. Will people bring up the incident? Certainly. But I'm not worried about it. That story was everywhere, so it won't go away when his name is mentioned. After it happened, I would go to church and my pastor would ask me about it. And my reply was, 'Dude, can you give me half an hour before you bring that up?!' [Laughs.]

"After [the photo came out] I went to church and my pastor asked me about Michael Phelps. My reply was, 'Dude, can you give me half an hour?!'"

NYSJ: It's interesting that in Subway commercials using several athletes — CC Sabathia, Nastia Liukin, Strahan, Laila Ali — none of them are identified on the screen, even though some of them may not be as well know as others. Why is that?
TP:  It gets people to talk about it. It generates a lot of buzz throughout social media. We tease Michael Strahan's reps and say to them, 'Subway made Michael more marketable.' So now you might see him in a Dr. Pepper commercial, and at one point he says 'I'm [still] Michael Strahan.' I think that's lame. You know him, or you know he is a former athlete. The athletes are real fans of Subway, which means we don't have to overdo it. You can take the hackneyed approach to it: 'Let me tell you who these athletes are because we think you don't know who they are.' But that's very 1970's. Someone like Michael, who has worked with us for a while, most people know who he is. You can criticize Dr. Pepper [for their approach].

NYSJ: Are other companies who identify famous celebrities missing that point?
TP: Our consumers may not know everybody in the commercials, but once we do have the insider factor, it builds from there. When you go out into social media, you find people asking, 'Who's the soccer guy in the Subway commercial? Oh, that's Tab Ramos? I didn't know that.' Or you'll find people saying, 'Phelps is in the spot and I missed it the first time.' The fact that you generate conversation after the ad has run is a good thing at the end of the day. And even if they don't recognize anyone in the commercial, consumers will say, 'Wow, there are a lot of popular athletes who eat at Subway. That makes sense because they have healthier food.'

NYSJ: Does that also affect other aspects of your marketing strategy?
TP: If you talk to any of the folks we work with, we are really and truly a part of the training routine of these athletes. Meb Keflezighi, the men's winner in the 2009 ING NYC Marathon who is running again in the 2010 Marathon, will tell you, 'When I'm training, I'm at Subway eating a Turkey Sub. When I'm indulging, I'm at Subway eating a Meatball Sub.' That's exactly what Phelps says, but Phelps adds jalapeños to his Meatball Sub. Subway is not the only thing they eat. But we have a legitimacy that other brands don't have, and we want to bring that to light. We used to work with figure skater Kimmie Meissner. She was like five-foot nothing and weighed maybe 90 lbs. She used to eat a foot-long Subway sub every day before she went out and skated. Why? Because she needed the protein. So we kind of morphed from those early scripted commercials to where Tony Parker would say, 'I eat Chicken and Cheese so I can take it to the hoop,.' And Ryan Howard would say, '. . .  so I can hit the long ball.' It became cause and effect.

NYSJ: Regarding the ING NYC Marathon on Nov. 7, Jared Fogel has been in training and is the center of a marketing campaign. Is this for real or more of a PR move as part of Subway's support of the event?
TP: A lot of people have the impression, as I did years ago, that if you are in really good shape, you can put on a pair of shorts and compete in a marathon. But you can't do it that way at that level. Jared has been training since the beginning of this year. He has run more than 600 miles in training. He has had several 20-mile runs, and in June he ran the half-marathon in Indianapolis in about 2:18. He is in fabulous shape. He's training like a demon. He's really taken to it. We have had him training with Michael Phelps, Ryan Howard, Blake Griffin. Brian Harper [former MLB catcher, current manager of the minor league San Jose Giants] is training with him. He has been out running in Central Park with Meb Keflezighi. We also paired him with St. Vincent Sports Performance in Indianapolis, which trains a lot of pro athletes.

A dedicated micro-site enables people to follow Jared as he prepares for the 2010 ING NYC Marathon.NYSJ: How are you going to handle his celebrity status during the NYC Marathon?
TP: We plan to have him running with Ryan [Howard]. A trainer is going to run with him and we'll probably have at least one other guy.  We want him to have his space. As always happens, they will walk the first section across the Verrazano Bridge until the mass of runners start moving, and then he'll start to run. We don't want him to get distracted. We are really happy with what he's doing. It has taken him to a whole new level.

NYSJ: How will marketing with Jared ramp-up to race time?
TP: We have had him [on signage] in all Subway locations. A lot of [hands-on] marketing where he is out running with Meb Keflezighi and others to drive awareness. Then we started to run a TV spot during NFL games and other sports programming. There will be more local activation as the event nears and then activation on the day of the event.

NYSJ: Is the NYC Marathon as well-known nationally as it is locally? You also had a spot a few years ago when Joe Torre was manager of the Yankees and Willie Randolph was manager of the Mets and more recently paired CC Sabathia of the Yankees and Johan Santana of the Mets.
TP: We do local spots. So in Orlando we had [activation] with the Magic, in Seattle we do stuff with the Seahawks. Because of who we are as a brand, we are perfectly appropriate in those venues. We have a big advantage in that we are perfectly acceptable in training venues. We are the official training restaurant of the ING NYC Marathon. We are the official training restaurant of the New England Patriots. No one else can get that designation.

Jameer Nelson of the Orlando Magic was part of a regional Subway effort last season.NYSJ: Was there anything positive for Subway that came out of the challenged economy?
TP: The good news is that 'The Great Recession' never existed at Subway. We grew right through it. As it turned out with a lot of properties and a lot of media, the pricing came down. So we continue to have more resources in the marketing space and now we can get even better value. So that was a good thing. One deal we have is the Subway Fresh Take Hotline with Mike & Mike on ESPN. That used to be the GM OnStar Hotline. GM couldn't renew that because they were going through all the trials and tribulations of a declining auto market. So we bought that. And we bought it at a time when there weren't many buyers in the marketplace. That was to our benefit. We got off to a really good relationship with the ESPN Radio folks and have been able to extend it. Now it's not just a radio relationship. Mike & Mike is also on ESPN 2. So there have been plenty of folks with whom we have been able to expand our relationship because the general pricing model has come down.

NYSJ: Does that also hold true for social media?
TP: Yes. If people like Michael Strahan, if they like Ryan Howard, CC Sabathia, we have expanded these messages into social media and that has become very powerful. Nastia Liukin has a very strong social media presence. When she does something for us via social media, we get a tremendous response. We have our Facebook page [with about 2.5 million friends] and Twitter like everyone else, but it helps to have people who are associated with the brand do messaging in social media spaces because that creates an on-going dialogue.

NYSJ: What do you see for Subway moving forward using athletes and sports marketing?
TP: One of the questions I always get is, 'How many is too many?' My answer is, as soon as you can't start activating then you have too many. We have different ways to activate. So whether it's congratulating someone on their performance, the way we did with CC last year when the New York Yankees won the World Series; or sending Ryan Howard to Williamsport to the Little League World Series, with which we are involved; or having Carl Edwards do PR for us at the Subway Jalapeno 250 down in Daytona over the Fourth of July weekend.

"Since LeBron James eats at McDonald's, would I be happy if Dwyane Wade said he eats at Subway? Sure I would."

NYSJ: Social media is user-driven, so how have you been able to harness that energy?
TP: We have lots of places where we can use our fans to activate the brand message. And that's a very powerful thing. Social media to me is a natural way of extending the conversation. In some ways, you could say it's another way to build PR about the brand. A brand can send those messages out, but it's better having a channel in which it's the fans and consumers who do it. People want to know what these guys are doing. Michael Strahan last year sent a tweet out saying, 'To all of you who don't think I eat at Subway, here's a picture of the sandwich I had today.' He just does it naturally, and that stuff gets picked up.

NYSJ: Anybody who you would love to see eat at Subway and perhaps become part of the marketing?
TP: As I said before, I get a lot of calls [from agents] telling me that their player eats at Subway. That's not always what gets us excited. We like our folks. But, maybe, since LeBron James eats at McDonald's, would I be happy if Dwyane Wade said he eats at Subway? Sure I would.

 

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