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Quiznos Is Pulling the Plug on TV Ads. Here's Why.

Quiznos Is Pulling the Plug on TV Ads. Here's Why.
Image credit: REUTERS | Rick Wilking

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As Quiznos comes back from bankruptcy, the sandwich chain is making some serious changes in its advertising strategy. That means going digital.

"Our advertising budget is kind of split between print media and digital, with a higher weight on digital advertising," Tim Kraus, the director of interactive and innovation at Quiznos, told Entrepreneur. "Within that, probably our primary focus is on video."

Since coming out of bankruptcy after completing financial restructuring in July 2014, Quiznos has turned to TubeMogul to help with this new digital focus for marketing. TubeMogul, which launched its first campaign with Quiznos in June 2014, is a platform that integrates the ability to buy and deliver video advertisements in real time.

With Quiznos betting a huge chunk of its marketing dollars on digital video during at a crucial time for the company, we wanted to know the reasoning behind the decision. Entrepreneur caught up with Kraus and TubeMogul execs to talk about why companies turn to digital when every dollar counts.

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Television isn't paying off

When Kraus says that Quiznos' advertising dollars are split between print and digital, savvy readers may have noticed he didn't mention one huge advertisement platform: television. That's because, at least for now, Quiznos is ditching the traditional method that still dominates advertising spending. And it does dominate: in 2014, digital video ad spending is estimated at nearly $6 billion, while TV ad spending is about $69 billion, according to research firm eMarketer.

However, when Quiznos was forced to take a hard look at how they divvied up their ad dollars after declaring bankruptcy, television just didn't make the cut.

"We've been around for 30 years, and we were a big TV advertiser, we were a big print media advertiser. And, we just saw the returns on some of these campaigns diminish," says Kraus. "The consumers we're trying to target are spending way more time online."

In other words, Quiznos is trying to reach the people most likely to go out and buy a sandwich, whatever platform they're on. "What we've learned in the last 10 years is you can't be everything to everyone and you really have to find that core audience," says TubeMogul CEO Brett Wilson.

For Quiznos, that core audience is young men in their teens, twenties and thirties – the kind who might eat a sandwich every day. These are also the kind of people who are watching lots of online videos. With platforms like TubeMogul, companies have the capability to chart what types of websites and videos are most like to attract this market, as well as use cookies to target individuals that fit in the core customer base.

"We want to make sure wherever our audience is going, that's where we have to go," says Kraus. "So if they switch to consuming video content on their mobile device, or their tablet or their desktop computer, that's where we have to be as a brand."

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Greater flexibility

Another big positive that online marketing has that traditional media lacks is easy tracking. With online video, it's possible to see how many people see an ad, and, very quickly after, monitor what sales come from these advertisements. Instead of spending thousands of dollars on a television ad campaign, by launching smaller digital campaigns, Quiznos can check what's bringing customers in the door – and what isn't.

According to TubeMogul, the ability to set up different ad campaigns easily and get quick answers on what boosts sales, brands are encouraged to be more creative and try new things.

"Because the flexibility and the fact that you can set up a $10,000 test in five minutes and test it right now, brands will use or bring to bear more creative aspects than they would if they… had to go buy one 30-second TV spot," says TubeMogul CMO Keith Eadie.

So, if you're seeing more advertisements that you actually enjoy online or even on cable television, you may have digital ads to thank.

New tech

At the end of the day, Quiznos buying into digital video advertising is a matter of reinventing and trying to stay innovative. However, for both the sandwich chain and TubeMogul, online videos are not the be-all and end-all of marketing. In December, TubeMogul launched a software that enables automated TV advertising – a taste of more television involvement to come for the company.

Meanwhile, Quiznos is still looking for new ways to bring in customers, especially online. The company is working on fine-tuning its online ordering experience, as well as other tech-savvy solutions.

"We've been looking at things like beacons: how can we utilize a beacon to measure in store visits or to kind of improve the communication messages we send our customers," says Kraus. 

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