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Score 73 - Account in Jeopardy: Noodles & Co. CEO, CMO step down amid sustained struggles
Subject: local, earned media, out-of-home, TV, digital, social media, print
Company: Noodles & Company, Broomfield, Colo.-based fast casual dining chain with 507-units across 32 states.
Opportunity: CEO Kevin Reddy and CMO Mark Mears have stepped down. CFO Dave Boennighausen will serve as interim CEO for the time being. Reddy's resignation comes as the fast casual chain looks to turn around negative same-store sales, while also attempting to stay on a growth path.
The company launched a brand repositioning last October (more Nation's Restaurant News that a change at the helm could infuse the chain with some much-needed energy and Nicole Miller Regan, senior research analyst for Piper Jaffray & Co, said the leadership transition "might be the first step in a series of changes that could help reset the brand's operational performance."
Note that Noodles recently added Jonathan Tress as VP of marketing, so changes at the top of several departments could signal sweeping strategy and roster changes. No formal replacement has been named for Mears, and during the Q2 earnings call last week, Boennighausen mentioned that his duties would be absorbed by the marketing department in the short-term. We do know that Tress is acting as head of marketing (at least temporarily).
Earlier this year, N&C announced it is shifting away from brand building messaging, opting instead for menu-focused messaging in mid-size markets (more violence inherent in the system).
Sellers - the priority is still on N&C's four largest markets, including the Mid-Atlantic area and Colorado, so those of you in these markets should hav a leg up. Keep in mind that the company is also focusing on its online order ordering and catering business, which it is looking to expand in the coming months. Boennighausen mentioned that while marketing spend is set to decrease about 1.5% in the back half of the year, spend will be centered on digital efforts, such as paid search and the promotion of off-premise offerings.
here). With a number of changes occurring in the last few months, as well as sustained struggles, this relationship is certainly in jeopardy. Therfore, those with experience in the millennial-focused fast casual segment should be getting pitches together and reaching out to Tress as soon as possible.
Target Audience: During the call, Reddy mentioned that N&C remains a “truly differentiated concept” that has an “industry-leading connection” to one of the most important and largest future demographic groups – millennial parents and their families.
Brand Platform Launch: Last fall, N&C launched its new “Made. Different – Real Food, Real Cooking, Real Flavors” brand platform (more here). This positioning will continue in 2016, with the company opting to “build upon this messaging” and embrace continuity in storytelling this year. Remember that in the Q2 earnings call in Oct. 2015, Reddy mentioned that N&C's competitors have increased advertising spend “dramatically” and that N&C needs to increase its presence in its markets and is “doing so.”
Digital Breakdown: According to Pix11.com (NYC).
N&C ran only 13 display ads on eight publishers in 2015 (<1% mobile). Top ad destinations included nashuatelegraph.com, evite.com and newsday.com (99% placed site direct versus programmatic). Additionally, four high impact and one video ad were run last year.
Other Executive Appointments: Last week, Victor Heutz joined the company as COO and Robert Hartnett was named chairman of the board.
Heutz joins from Buffalo Wild Wings, where he served as VP of US franchise operations. Harnett is the former CEO of Houlihan's Restaurants.
Noodles & Company
520 Zang St.
Broomfield, CO 80021
Vice President, Marketing