Generating the most ROI from a digital marketing budget

Domino's Pizza CFO Michael Lawton said last week that the company is shifting its advertising weight away from print and more into digital.

"Digital, whether that would be paid search or banner ads or social media, that is definitely the way consumers want us to communicate with them. They are looking at social media much more and we're clearly trying to lead in that direction," he said during an investor presentation.

The tricky part with this strategy, however, is gauging quantifiable data from such the vast, fast-moving digital space. Some startups are trying to figure that out for merchants. For example, Yub launched an offline affiliate network just this week that enables restaurants to track consumers from online clicks through offline purchases. Privy.com also has a platform that measures online marketing efficiency. The company was founded two years ago and is geared heavily toward the restaurant industry.

Pizzamarketplace.com had the opportunity to talk to Privy's co-founder Jake Cohen about the increasing need for restaurants to market digitally, and the most effective channels to do so.

Pizzamarketplace.com: How does Privy's solution work?

Jake Cohen: Let's say a customer finds a Red Robin promotion and they click on that promotion and then sign up through email. When they receive the promotion through email, they click on the link that gives them a code for redemption. Our system then checks it off and the dots are now connecting. Before, customers would just use a coupon and the restaurant wouldn't get any information about that customer. The marketer now gets that scale. If I pushed this offer out to 100 different people, they can get the location and the person who redeemed it. It helps marketers get an ROI on their digital spend because they can see what channels are working.

Pizzamarketplace.com: What is the most effective digital platform for restaurant marketers?

JC:

1. Facebook: There are a few potential things you see from a consumer point of view. The first is a post from a brand you follow. The second is something that shows up in your news feed from a brand you don't follow, a boost. The third is an ad on the right-hand side of the screen — a Facebook ad. A Facebook post costs nothing because they're already captivated, they're already following you. That's the most effective from an ROI perspective.

Facebook ads, though — the ones on the right-hand side — can provide interesting geotargeting opportunities, and you can also target mobile users. We work with an 11-unit chain that did this and spent under $400. They made money and they got 1,100 new email addresses into the system.

What we see more, however, is that Twitter and the brand's website are better at driving immediate sales and same-store sales than Facebook and email.

2. Twitter: Twitter is super quick. There is a spirit of immediacy there and if you want to drive sales from online and do it for free, you build a Twitter audience and push out a promotion.

3. Website: When people look up something, they usually go to Google and that usually directs them to the brand website first. If a consumer wants to find out more information, they go to your website. If they like that information and that experience, then they connect with you socially. That's not saying Facebook isn't valuable. Your Facebook page is your own ad network, they already like you and you have direct access to them.

4. New social sites: Pinterest and Instagram both just started advertising so it's hard to tell where this will go. But anything image based is inherently branded. There is an emotional connection to a brand when there is a picture involved.

Pizzamarketplace.com: What are some trends you're seeing in the restaurant space, in terms of marketing?

JC: Consumers are now making decisions about where to eat by going online and searching around. Consumers think, "What am I in the mood for?" Then they find it. It's just easier for them to get more information.

The marketing scale, then, is now balanced on the side of consumers. With digital, brands can now know everything down to their clicks.

Pizzamarketplace.com: Are there disadvantages with having access to such 'big data?'

JC: It is near impossible to deliver that scaled perspective. Big data means different things for CEOs, for the IT department and for marketers. You can't just push a button and have it work for you. With big data, it has to be thoughtful.

Pizzamarketplace.com: How big, in your opinion, will mobile get in the restaurant space?

JC: I think a big mistake in the marketplace right now is considering mobile as a unique channel. It's not, it's a window. You can watch content on your tablet, just like TV. You can access email on your phone, just like your desktop. The context is different, but the content is nearly the same. The best marketers get this and they use different ad formats and different channels for different content. For example, hit the consumer with a radio ad on the way to work, use geotargeted ads on social media at lunch, and at night, run a TV ad.

Pizzamarketplace.com: What marketing trends do you see emerging in the next few years?

JC: It is not to build a sale anymore, it's to build a relationship. What is going to change over the next 2 to 10 years is the conversation will shift to "How do I take this relationship with my customer to the next level, to get them to come in every day, twice a day?"

How do you build habit and frequency? You do it by marketing on a one-to-one basis instead of just blasting out a message and hoping they spend money one time.

Read more about online and social marketing.

Photo provided by Flickr user SEO Planter.

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