Tim Hortons is making the biggest investment in brand-image marketing since Brazilian private-equity firm 3G Capital bought control in 2014, as it attempts to move past months of negative headlines stemming from a dispute with franchisees.
The advertising, which launches online on Thursday and on television next week, will double the Toronto-based coffee chain’s spend on brand building, with at least five ads launching over the next year.
The campaign − which is inspired by “true story” ads that the brand has been known for in the past − is one part of a larger effort to win back customers with improvements to product quality and the look of the restaurants. The ads are intended to reinforce a sense of Canadian identity in the brand, taking the focus off corporate issues at parent company Restaurant Brands International (which is controlled by 3G Capital) and emphasizing the restaurants' relationship to their communities.
“In the last couple of years, we’ve always focused on products. We should have probably changed that earlier,” said Tim Hortons global chief marketing officer, Axel Schwan. “… We were too extreme on the one side, and now we’re finding the right balance.”
The company’s image has been hampered since last year by the complaints of a group of franchisees, who formed the Great White North Franchisee Association to advocate against cost-cutting measures that many said were affecting product quality and store performance. Another issue was alleged mismanagement of marketing spending. Last month, an Ontario Superior Court judge struck out some of the claims of the franchisees who are seeking class-action status against the company, and told them to provide more details to back up their claims.
The dispute is not the only reason Tim Hortons' brand has suffered. After a 21-per-cent hike to Ontario’s minimum wage, news emerged earlier this year that some franchisees were cutting employee benefits to keep costs down − leading to a social-media campaign calling for a boycott. In March, Tim Hortons fell out of the top 10 in Ipsos Canada’s annual “most influential brands” survey for the first time in six years, going from ninth place to 16th.
The new ads don’t quite carry the emotional heft of the older stories, such as an immigrant family’s airport reunion, or an adult son’s realization that his demanding father was always proud of him. Partly, that’s because the old ads were based on amalgams of real stories, rewritten, depicted by professional actors and filmed for dramatic impact. The new spots aim to tell slice-of-life stories − such as employees who asked one loyal customer to teach them enough sign language to take her order; a man modifying a coffee cup to make a moose call; or a child using money that he received as a gift to pay for someone else in line. All were submitted by real customers, who provide the voice-overs.
The work comes after a major turnover in the company’s executive ranks, particularly in marketing. Last year, Tims ended a relationship with its advertising agency, J. Walter Thompson Canada, which went back to the 1990s. It now works with Toronto-based Zulu Alpha Kilo, and Gut, an agency based in Miami and Buenos Aires.
In April, Restaurant Brands chief executive Daniel Schwartz said on a conference call to discuss the company’s earnings that it would be taking “decisive and urgent actions” to address the disappointing performance at Tim Hortons. Those actions included naming Burger King North America president Alex Macedo as Tim Hortons brand president (Burger King is also owned by RBI), who in turn hired Mr. Schwan, Burger King’s former CMO. He brought on Coca-Cola marketer Paloma Azulay as global creative head for Tims.
“We were not structured in the right way,” Mr. Schwan said of the marketing team. “... My boss asked me to take a fresh look.”
The new marketers familiarized themselves with Tim Hortons’s past advertising. They stumbled on the EveryCup.ca website, which the company launched in 2008 to encourage customers to share stories, and which they then used as the basis for many of its “based on a true story” ads. It had roughly 17,000 posts; “a gold mine,” Ms. Azulay said, even if the old site “looked like MySpace.” The company began contacting people who had submitted posts, and used their stories for this campaign. It has built a new “Tims True Stories” website, and will be inviting more submissions.
The return to the “true-story” ads was a request the executives heard from many franchisees.
The restaurants' results have improved more recently with the launch of all-day breakfast items, restaurant upgrades and initial efforts to improve the marketing approach. In October, it released an ad that was well-received about Kenya’s only hockey team, bringing the players to Canada for a game and a surprise meeting with Sidney Crosby.
"It’s a really, really significant investment,” Mr. Schwan said of the new campaign. “Doing advertising that is not only around selling a product, but sharing stories, that’s what made this brand strong in the first place.”