Shake-up on the menu in fast-food marketing

By IRENE CHAPPLE

Troubled fast-food retailer Restaurant Brands has reshuffled its advertising agencies in a bid to stem sliding sales.

The company, which runs the KFC, Pizza Hut and Starbucks brands, had awarded its multi-million-dollar media-buying account to Carat.

The account, worth $11 million at ratecard, was previously held by Colenso BBDO.

Pizza Hut, which was held by Singleton Ogilvy & Mather, has gone out for pitch.

The Pizza Hut account is worth $4 million-$5 million at ratecard and up to four agencies are expected to pitch, with a result expected mid-year.

The KFC brand was informally put out for pitch before Christmas but Singleton Ogilvy & Mather has retained the creative work.

Restaurant Brands chief executive Vicki Salmon said that after seven years with the same agencies it was time to see what the market had to offer.

Salmon said the disappointing sales results "had been a part of [the changes] ... a very big part of it".

The marketing partnerships were not working well together, and "if you are not working together you don't have a good outcome. After the difficult times [we asked] 'are we working together well?' ... and the answer was no. People were working hard, not necessarily together."

Carat, which already held the Starbucks media-buying business in New Zealand and the KFC and Pizza Hut accounts in Australia, brought some excitement and enthusiasm to the table, said Salmon.

The mix of advertising buying may change, particularly given the slump in the number of young males watching television, while rates continue to increase.

Carat, which had pursued the account, had researched the brands and Salmon said the company offered new insights.

Managing director Robert Roydhouse said they were delighted with the win and would be employing support staff to cope with the increase in work.

KFC creative coming out of Singleton Ogilvy & Mather is expected to change, but Salmon would not give details.

Restaurant Brands gave two profit warnings last year within a few months.

Its main profit engine, KFC, has been hit hard with declining sales and Starbucks is also struggling.

Pizza Hut remains the company's bright spot, producing steady increases in sales.

The company will report its fourth-quarter sales result early next month.

It's been a busy start to the year for the advertising industry, with multi-million dollar client the Lotteries Commission also putting its account out for pitch.

The commission, which spends more than $10 million on its advertising annually, is expected have a shortlist of three agencies by next week.