What do you get for your digital-marketing dollars? Figuring out how much revenue or brand value companies are generating from their investments in digital media seems to be getting more and more complex. While it’s simple to measure click-through rates on the Web, impressions on mobile devices, tweets on Twitter, and “likes” on Facebook, the business impact in the real world is notoriously difficult to quantify. So as marketers “spread their spending over a widening set of digital options,” says Chuck Richard, vice president of Outsell, a research firm based in Burlingame, California, “they need more accountability.”
Accountability becomes even more urgent when you consider the numbers. In 2010, for the first time ever, spending on digital media will surpass spending on print media in the United States, Outsell forecasts. The $120 billion that companies are shelling out this year includes all digital advertising and marketing efforts, including website development, edging past the $111.5 billion to be invested in print-based marketing. Meanwhile, the U.K. has become the first major economy in which spending on Internet advertising has overtaken spending on television advertising. These are milestones in a movement that shows no sign of abating, as digital continues to claim an ever larger share of the corporate marketing budget.
Yet sometimes, companies do know when their digital investments are delivering results. These two case studies described here represent only two strategies, but they highlight a big trend–that it’s now possible to engage an online audience in novel ways that deliver measurable returns. Below, we look at the challenges faced by these two marketers, the creative digital strategies they deployed, and finally the impact on business.
Pizza Hut’s iPhone App: Building your own location-aware pies
As of two years ago, Pizza Hut had minimal presence in the digital world beyond a rudimentary website–even though it’s one of the flagship chains of Yum Brands, the world’s largest fast-food restaurant company. Brian Niccol, the Dallas-based chain’s chief marketing officer, decided that he wanted to create something innovative and fun that would encourage young, tech-savvy, time-starved customers to order up pies. Since the success of the iPhone was making headlines at the time, it became a natural choice for reaching this demographic.
Niccol hired the Dallas-based digital agency Imc2 to create an app that would, in effect, put the pizza kitchen in the customers’ pocket, letting them pinch, drag, and shake icons representing pepperoni, mushrooms, and other toppings onto a graphical pizza crust. The iPhone would then determine which of the chain’s thousands of locations the customer happened to be nearest. With the app, “you get to engage in the ordering process, which is typically mundane and not all that exciting,” Niccol says. Equally important, he adds, is the “confidence factor”: by building a model of their pizza, customers are assured that their order is correct.
The company advertised the new app online, in print, and on television–even winning a placement in Apple’s own iPhone commercial. Within two weeks, the Pizza Hut app was downloaded 100,000 times. Within three months, iPhone users ordered $1 million worth of pizza. Niccol describes the app as “game-changing.” It now has millions of users on the iPhone, iPad, and Android platforms. Niccol expects half the company’s phone orders to come from apps and texting, accounting for about $500 million in revenue.