Domino’s, the restaurant chain, is “not pulling back one bit on advertising” during the COVID-19 crisis, as it sees the value in its voice being heard, as well as clear advantages from other brands cutting back.
Richard Allison, the CEO of Domino’s, discussed this subject on a conference call held with investors, where he reported that US same-store sales had grown by 1.6% in the last quarter, despite widespread lockdowns.
Introducing contactless delivery and drive-up carry-out options helped facilitate this outcome, along with rigorous sanitation procedures. But advertising also played a central role.
“We look at a couple of things around that as we think about it,” Allison said. (For more, read WARC’s in-depth report: Domino’s keeps faith in advertising despite “existential crisis” for restaurant industry.)
“One is, we view it absolutely as a time to continue to lean in hard on getting our voice out there. So, we’re not pulling back one bit on advertising during this.”
A proof point: research firm Kantar conducted a study of food-delivery ads in the US from February 2 to April 11, and pegged Domino’s as the top spender overall, with a 9.7% year-on-year increase in expenditure to $80.1 million.
As many brands cut their adspend, Allison added, there might be clear payoffs for those that maintain budgets. There are metrics that support that optimism, too.
Take, for example, Gross Rating Points (GRP), as calculated by multiplying the percentage of the target audience reached by their exposure frequency to ads.
Meeting objectives on this metric was difficult before COVID-19, due to intense competition for eyeballs, but may be easier today.
“There has been a heavy demand out there for a lot of the same customers that we want to reach. And, therefore, GRP delivery has been a little spotty out there in the marketplace over the course of the last couple of years,” Allison said.
“And we expect that we may see some benefit in that, and just getting the full delivery of the GRPs that we want to buy anyway.”
Sourced from WARC