Subway Signs On With Yahoo! Marketing Program

Yahoo and Pepsi are continuing their four-month-old relationship by launching a new marketing deal in conjunction with Subway Restaurants.

The three companies have teamed to roll out an integrated marketing campaign leveraging Subway’s in-store traffic and Yahoo’s online visitors. The centerpiece of the campaign will be gosubway.yahoo.com, a site on which users can redeem codes in return for discounts at Yahoo-affiliated online merchants.

The site will function similarly to PepsiStuff.com, which Yahoo and Purchase, N.Y.-based Pepsi created after signing a co-marketing deal in August. PepsiStuff.com offers points and discounts at Yahoo Shopping when users redeem peel-off tabs from Pepsi beverages.

Now, Subway was pulled into the mix through a previous relationship with Pepsi. As a result, gosubway.yahoo.com will offer discounts at Yahoo Shopping when users enter codes from their Subway drink purchases, similarly to PepsiStuff.com. Participating Yahoo Shopping affiliates include BarnesandNoble.com, SamGoody.com and Macys.com.

Spending was not disclosed in the deal. Subway will promote the effort with TV spots and in-store banners at its more than 8,000 restaurants in North America. The campaign will end Dec. 24th.

The campaign for Milford, Conn.-based Subway is part of Yahoo’s Fusion Marketing program, which focuses on partnering with offline companies to promote their brands online and promote Yahoo offline.

“Reaching consumers where they are and delivering measurable value each and every time someone interacts with Subway is key to our success and to driving traffic to Subway,” said Tricia Kingston, manager of strategic planning, Subway Franchisee Advertising Fund Trust. “Through Pepsi’s relationship with Yahoo, we have the unique opportunity to work with Yahoo Shopping to deliver a program that seamlessly unites our in-restaurant and online efforts.”

Prior clients of Yahoo’s Fusion Marketing program include E*Trade and Procter & Gamble. Yahoo said the PepsiStuff promotion has generated more than three million registered signups on the site.

While potentially lucrative for Subway, the new program also represents a continuing effort for the online content giant to move beyond banner advertising as its chief source of income — a move of which some investors might approve, considering that many in the financial community lately have voiced concerns about Yahoo’s dependency on ad revenue. The company has also been significantly downgraded in the past few weeks on advertising concerns.

Yahoo, however, is optimistic about its online marketing potential.

“Yahoo’s comprehensive global platform is ideally suited to provide a suite of targeted, measurable and cost-effective solutions that enable Subway to expand its online reach and deepen its connection with consumers worldwide,” said Yahoo Fusion Marketing director Murray Gaylord.

Yahoo has “leading brands working with [it] to bring offline marketing concepts online to build consumer relationships,” he added.