Papa John’s International Inc.’s new partnership with former NBA superstar Shaquille O’Neal is a bid for “cultural relevancy” following many months of fruitless effort to regain its footing after its founder, John Schnatter, became embroiled in controversy, according to an industry expert.
On Friday, the pizza delivery chain announced that O’Neal would join the company’s board and become an ambassador for the brand.
Earlier this month, Schnatter agreed to step down from the Papa John’s PZZA, +0.92% board. He had already resigned as chief executive in 2017.
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Papa John’s has floundered since Schnatter blamed NFL players’ civil rights protests on the company’s poor sales performance. Further, Schnatter used the N-word on a company conference call.
“‘Shaq to the rescue’ seems to be a formula for success for brands that need an all-eyes-on-me moment or a quick injection of cultural relevancy,” said Joseph Anthony, chief executive of Hero Group, a creative and new media agency.
O’Neal is or has been a spokesperson for a number of brands including Buick, Gold Bond, J.C. Penney Inc. JCP, +0.33% Icy Hot and Pepsi Co. PEP, +0.95%
“The challenge is sustaining that relevancy through action,” said Anthony. “Not taking anything away from the power of Shaq. As we all know the force is strong with him in the ad world. However, brands’ actions have to go well beyond a spokesperson in order to build trust and favor with today’s millennial cohort, but it’s a good start.”
In September 2018, Papa John’s launched a creative campaign, Voices, which focused on a diverse group of actual owners and operators of Papa John’s restaurants.
Adding Shaq to the marketing effort continues that effort to show its embrace of diversity.
“Aside from the racist comments made by the Papa John’s chairman, the brand has long ignored the diversification of America and the growing liberal views that dictate how they choose to adopt brands and products into their lives,” Anthony said. “America is becoming more diverse, and the urban battlegrounds that brands like Papa John’s need to win are becoming increasingly black, brown and millennial. It’s been obvious that ads with Peyton Manning aren’t enough to build a relevant voice with these audiences.”
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BTIG analysts expect Papa John’s to partner with other social influencers, perhaps even a celebrity chef, as part of a marketing effort that will shift to new channels. BTIG met with Papa John’s management and walked away expecting the company to hire a new chief marketing officer “in the near future.”
The CMO position has been vacant since May 2018 with others filling in on an interim basis, according to a company spokesperson.
“Management’s commentary was that previous marketing was too centered around television and sports, which was good at reaching older customers, but needed a new approach that resonates with younger and minority consumers,” BTIG analysts led by Peter Saleh wrote.
BTIG rates Papa John’s shares neutral.
Papa John’s stock has rallied 23.7% for 2019 so far while the S&P 500 index SPX, +0.72% has gained 12.4% for the period.
