From employing familiar tactics like buying cable TV ads to testing novel social-media strategies with a less obvious return on investment, restaurant marketers are looking for ways to extend the reach of their brands and translate that awareness into sales.
Chipotle Mexican Grill, Panera Bread, Denny’s, Hospitality Democracy, Firehouse Subs and Cinnabon are among those operators that have devised effective marketing programs spanning the spectrum between traditional media and social media — and, in some cases, incorporating a combination of the two.
The following five case studies offer a look at how those brands struck gold with their individual marketing approaches. But while each operator took a different tack, one common thread connects them all — the marketers’ willingness to try something new.
Panera Bread first ran its branding commercials “A Belief in Better” and “The Freshly Baked Bread Difference” — which star founder and co-chief executive Ron Shaich — last summer on network television. But in March Panera announced a significant increase in media spending, and directed much of that investment to advertising on cable TV.
“Our research has demonstrated that we continue to obtain a very favorable return from our marketing investments, particularly our media,” said Michael Simon, Panera’s chief marketing officer. “As a result, we will continue to significantly increase our investment in our media in 2012.”
Panera opted to make its national advertising push on cable after research found its core customers spent more than twice the amount of time watching cable TV than they did watching broadcast network programming, Simon said.
“At the highest level, our media plan is guided by reaching the right customer through the right medium at the right time, as efficiently as we can,” he said. “National cable not only allows us to reach our target where they already are, but it is also a more efficient cost per point, with lower cost of entry.”
Cable is an especially efficient buy in an election year, he added. Because few political candidates or political action committees buy time for their ads on cable and instead buy that time on network TV, Panera’s new commercials will not get lost in the muddle of attack ads.
While cost and competitive considerations drove Panera’s decision for a cable campaign, Simon said, the cable-versus-network debate had no bearing on the direction the chain took with its creative. Panera reprised the quality-focused spots rather than develop new commercials centered on promotions or price points, because “competing with other concepts on price is not a game we want to play,” Simon said.
“Our role as marketers is to amplify the unique experience that occurs each and every day in Panera’s bakery-cafes,” he said. “Our approach around our creative would be consistent whether we selected network advertising or cable.”
After reporting negative annual same-store sales in 2008 for the first time in its history, Firehouse Subs made a marketing adjustment to help reverse the decline. The chain eliminated its required contribution to the national marketing fund for its franchisees, instead allowing them to allocate the money toward local-store marketing. This first move did not pan out, however.
“We weren’t gaining the traction we’d hoped to,” said chief executive Don Fox.
In May 2009, Firehouse’s newly signed ad agency devised a plan to advertise with branding spots on the radio. But in order for it to work, the chain needed to increase its marketing spending from 3 percent of sales to 5 percent — 1 percent to produce the creative, and 4 percent rather than 2 percent for media buying.
Firehouse tested the model in three corporate markets, producing double-digit same-store sales increases.
“The plan worked phenomenally well … and we took it to our franchisees and were successful in selling the idea of investment spending to 70 percent of our franchise community, including all major markets,” Fox said.
The chain also upped the corporate investment to the ad fund, adding an incremental $1 million in matching funds in 2011 and another $1 million this year with no strings attached.
Since the Dec. 26 start of the fiscal year, the brand’s radio advertising has touted its signature Hook and Ladder sandwich and its systemwide rollout of the Coke Freestyle fountain. Year-to-date same-store sales are up 13 percent, Fox said.
“The strategy has paid great dividends,” he said. “No doubt the Freestyle was the key tactic, but without that marketing investment, there’s no doubt we wouldn’t be creating the same level of awareness.”
Deciding to put incremental money into marketing from retained earnings means taking a long-term view when “all the traditional thinking for return on investment goes out the window,” Fox said.
“You do it for a lot of intangibles,” he said. “You do it to support the health of your system, make a nontraditional investment in your franchisees, and to prove to them the value of incremental media, which further encourages them to continue investing on their end.”
An increasingly popular nontraditional investment for marketers is the move toward what Denny’s chief marketing officer Frances Allen called “branded entertainment” — or original content chains produce to distribute online, advertising the personality of a restaurant instead of its food.
Denny’s took this approach with its “Always Open” webisodes on CollegeHumor.com and its “Skillet Whisperer” spoof with Cesar Millan on FunnyorDie.com, as did Subway by sponsoring its “Fresh Artists” series of short films shown at the South by Southwest conference.
But Chipotle Mexican Grill recently took branded entertainment mainstream with its “Back to the Start” video, an animated parable of the ills of industrialized agriculture, set to a Willie Nelson cover of Coldplay’s hit “The Scientist.” Chipotle first aired the two-minute-20- second video on YouTube last August “to illustrate the differences between industrial agriculture and farming methods we prefer, but in a more visually accessible way,” said Chipotle spokesman Chris Arnold.
It has been viewed on YouTube more than 6 million times.
“‘Back to the Start’ wasn’t intended to be an ad at all when it started; it was just a branded narrative film we would use to promote our loyalty program,” Arnold said. “As it came together, we liked the direction it was going, and we wanted to get it more attention than originally intended.”
Chipotle took the video from YouTube and its brand website to more than 10,000 movie screens in the fall of 2011, and as viewership grew, the brand received more positive feedback, Arnold said. That momentum ultimately led to Chipotle buying a block of time during the broadcast of the 2012 Grammys to air the commercial on national TV.
While branded entertainment can cost a restaurant chain as much money to produce as any TV commercial, the distribution methods, which are primarily online, can be far more cost-effective, Arnold said. He added that the approach Chipotle took allowed the brand to escalate its media spending with “Back to the Start” as it grew more confident the video was resonating with guests.
“We put it on YouTube first, which costs nothing, and then spent a good amount on the theater buy,” he said. “But between its run on the Grammys, in theaters and online, it has been viewed by more than 60 million people. It’s been a sufficiently breakthrough piece that it’s driven tremendous news coverage that increases our exposure and is popular in social media. By taking a different approach, we got a lot more mileage out of the video.”
A portion of revenue from every download of Nelson’s cover of “The Scientist” sold on the iTunes Store goes to Chipotle’s Cultivate Foundation and the Cultivate music festival, which also “educates as it entertains,” to spread the brand’s advocacy for sustainable farming. Chipotle plans to stage the festival in Chicago and Denver this year.
Linking content on different social media platforms is similar to branded entertainment’s crossover appeal from social media to national advertisements in that it can increase traffic for chains’ networks and grow their base of engagement online. Marketers need only take advantage of social networks’ ability to automatically push posts from one platform to another, said Joe Sorge, a multiconcept operator in Milwaukee.
Sorge has expanded his company, Hospitality Democracy, on the strength of the loyal following his restaurants have fostered on Twitter, Foursquare and Facebook.
“Social media is not best used for customer acquisition, but for maintaining top-of-mind awareness in a crowded marketplace,” Sorge said. “What cross-posts do, if people are seeing pictures of your burgers on Twitter every day, for example, is demonstrate your style of customer service for the general public watching you.”
Among the tricks Sorge suggests is creating a Foursquare venue for a restaurant that consists of the eatery’s Twitter handle or includes a Twitter hashtag.
Last summer, he set up a Foursquare venue for his Zaffiro’s Pizza kiosk at Milwaukee’s Summerfest concert with the name “Zaffiro’s Pizza #summerfest.” When people checked into that venue on Foursquare, it automatically pushed a post to users’ Facebook profiles or Twitter feeds, the latter using a preloaded tweet that read: “I just nommed @zaffirospizza at #summerfest.” That automatic tweet showed up in thousands of Twitter users’ search results when they looked up information about the concert using the “#summerfest” hashtag.
For the opening of a location of his AJ Bombers concept, Sorge placed QR codes around the restaurant that, when scanned on smartphones, pulled up a preloaded Facebook status update a user would have to post in exchange for the password to the restaurant’s super fast 4G wireless Internet “hotspot.” Thousands of friends in those users’ networks saw such updates and learned about the brand.
“Creating these short updates can call attention to a photo or poll question, which amps up engagement on Facebook and increases your EdgeRank,” Sorge said, referring to Facebook’s ranking score for brand pages’ influence and popularity. “The higher your score, the more news feeds your status updates show up in.”
Cinnabon wanted to leverage the integration power of location-based social media, but faced the problem of too many venues listed in Foursquare and Facebook Places.
Because of duplicates, missing listings or incorrect coordinates for smartphones’ GPS systems, many Cinnabon locations wouldn’t show up in search results for Foursquare users, said corporate communications manager Rachel Hadley. Through a service called venue optimization, Cinnabon corrected those problems, entering the correct information for each location on each network.
“Venue optimization creates one location that would be checked into most often, and that increases your visibility on Foursquare,” Hadley said. “If there are 10 other venues for that location with a few check-ins, they’ll all be lower in the search results.”
After the chain began a venue optimization campaign last April, it increased engagement on Foursquare and Facebook by 12.5 percent and 19 percent per month, respectively, through July. Upon completion of venue optimization in July, Cinnabon’s numbers reached a higher plateau of engagement by August, with check-ins increasing another 43 percent and 63 percent on Foursquare and Facebook, respectively, in one month.
That higher base of social media activity allowed the brand to execute a Foursquare check-in special to benefit its cause-marketing partner, Operation Gratitude. In October, for every Foursquare check-in it received, Cinnabon donated $1 to the charity, which sends care packages to military service members serving in war zones.
From 250 participating bakeries, Cinnabon garnered $10,000 in check-ins and raised an additional $40,000 in the stores. Its social media engagement climbed further, with Foursquare check-ins jumping another 122 percent and tweets increasing 113 percent.
“A systemwide check-in special, and connecting it with an organization that a lot of people respect, was a great promotion for us,” Hadley said. “Foursquare specials are getting more aggressive, so our campaign needed to be pretty tempting, and a $1 donation for every check-in was a bold move.”
Between the April start of the venue optimization program and the end of 2011, Cinnabon’s customers increased Foursquare check-ins by 387 percent, Facebook check-ins by 230 percent and tweets by 1,600 percent. During this period, Cinnabon also increased the total number of “likes” on its Facebook page by 128 percent.