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New vs. Traditional Media: How High Is Your ROI?

by CRAFT | Media / Digital

By George Scoville and Brian Donahue

Commercial brands across all sectors of the global economy have begun combining web video advertising with Facebook ad campaigns and interactive Twitter accounts in recent years to help enlist and engage legions of existing and new fans. Erik Qualman of “Socialnomics” web video fame contends that the ROI on social media is that “your business will still exist in five years.”

While this seems like an empirically testable hypothesis, we wonder if anecdotal evidence can’t teach us something about the value of new media, set against more traditional marketing paradigms.

John Balz tells a grim story about Taco Bell’s failing efforts to engage consumers and preserve their brand with a Facebook fan page:

Over the course of a year, the number of friends on Taco Bell’s Facebook page rocketed from 500,000 to 6 million fans. Sounds great. Then, in the middle of an ongoing unflattering lawsuitabout the quality of its beef, Taco Bell decided to offer those 6 million fans a free taco — no strings attached. They didn’t need to buy anything. They were already Facebook fans, which means they had already paid the very minor costs of “liking” Taco Bell. It was an offer from a company that Blum says wanted to tell its fans, hey, come and get a free taco.

Two hundred thousand people did. Almost 97 percent on passed on free grub they supposedly “liked.”

Cases like that explain why the bulk of Taco Bell’s marketing budget goes to television (and some radio) ads. Social media remains a small part of the budget because the company hasn’t figured out how, in Blum’s words, to use it to “make the cash register ring.”

One way to think about this case is that high-profile negative coverage of a legal scandal can damage any brand, and to a certain extent, that’s true. But another, perhaps more important, way to think about it is something we at CRAFT know all too well: social media isn’t a salve for brand woes, and one size doesn’t fit all.

From the first “Drop the Chalupa” and “Yo quiero Taco Bell” chihuahua commercials, Taco Bell enjoyed traditional marketing success. Gimmicks like this and the “crun-chew-eezy” ad campaign helped create buzz for the Bell. Wading into Facebook made sense for them, since over half of Facebook users are old enough to remember the chihuahua. But technology doesn’t replace relationships — it enhances them.

The taco, for better or worse, is the way the Bell most intimately relates its brand to consumers. If a high-quality taco doesn’t exist before the social interaction takes place, then the social interaction can’t possibly enhance the taco. Giving free tacos to 6 million people, while bold, seems desperate. More broadly, economists among us can sense a substitution effect at play here, too. The emergence of higher quality alternatives like Chipotle, Qdoba, and Baja Burrito probably crowded Taco Bell out of its once-dominant market share.

But does this mean it always makes sense to devote the lion’s share of your marketing budget to traditional media marketing?

For some brands, the answer is yes. We wonder, however, if effectively integrating old and new media marketing can improve ROI. Are TV and radio just the media for selling gimmicks? We suspect that each medium increases ROI for one another than any one form can generate alone and separately.

Southwest Airlines has a reputable brand. It also has a strong social network presence. How much has that presence directly or indirectly affected revenue?

Southwest’s rebrand really began to soar when they created TV ads about the now-popular Ding! desktop application, a user-customized platform that delivered tailored fare special alerts directly to the user. They used TV advertising to drive people online, and most importantly, end users could customize Ding! alerts to notify them of fares they cared about. They (and JetBlue) even print a naked URL on the wing of their aircraft, literally driving customers back online after they’ve already purchased a ticket.

Add to this marketing approach real-life service innovations like a new brand-specific seating approach, an option to upgrade to priority seating (that includes drink coupons), consolidation of national routes, and the joke-telling-sometimes-singing in-flight staff, Southwest dedicated considerable resources to enhance the consumer experience.

In short, they did what Taco Bell did not: they made sure the product was desirable enough to stand on its own, without ever launching aggressive new media campaigns. Their product and brand management were so effective that the Kevin Smith Twitter flap didn’t put a dent in what they’ve been able to accomplish as an enterprise.

Domino’s Pizza skirts a grey area between Southwest’s savvy and Taco Bell’s blundering.

After suffering a public flogging when years-long complaints about their pizza’s quality came to a head a few years ago, Domino’s promptly committed to a new recipe for their primary breadwinner. They also developed a social engagement strategy, using the #dpzchicken hashtag on Twitter to monitor feedback, asking users to post photos of the pizzas they received online, and creating a dedicated YouTube channel so customers could hear directly from Domino’s top chefs in the corporate kitchen.

Domino’s has also combined traditional marketing with the pizza rebranding strategy, taking to television to offer a mea culpa, explaining that anyone can send in their pizza box top with complaints on it. They have also used graphic design real estate on pizza boxes and door hangers to drive people to engage on Twitter and Facebook.

So Taco Bell could probably take a few cues from Domino’s, and try revamping the product before engaging online – or, at any rate, use social engagement to enhance a rebranding effort, rather than offer 6 million “fans” a free taco on Facebook – something they already don’t like.

But Domino’s yesterday waded into gimmick territory by unveiling a one-week-only Facebook game featuring the Noid of 1980s TV ad fame. Each hour, Dominos rewards the top scorer on Facebook with a free pizza.

Will the rebirth of the Noid help Domino’s Pizza’s bottom line in the long run?

It’s difficult to tell. What’s clear is that TV isn’t the only place for gimmicky marketing tactics. If anything, the Internet has helped usher in a brand new universe of marketing opportunities, and there have been no shortage of attempts at grabbing consumers’ attention in the increasingly crowded, noisy information economy.

And what’s important to note about the Noid campaign on Facebook is that it’s different from Taco Bell in two ways:

• It’s a short-term gimmick that encourages user participation. Not only is Domino’s asking people to engage – to do more than just consume one-way transmissions – but it’s doing so with a fixed timeline in mind. They aren’t putting their bottom line at risk, and the exclusivity of a once-per-hour winner doesn’t seem desperate.

• Domino’s has spent two years prior to this engaging online in multiple ways, and redeveloping its product in measurable ways. Simply put, there are now reasons that once did not exist for people to want to engage with Domino’s online.

What can we learn from all this?

All too often, organizations (and even political candidates) blame poor social and traditional media strategy for failed publicity and marketing attempts. But what people forget is that a brand is much more than ads or social media; rather, the product, service, company, and culture define brands.

Social advertising and marketing can enhance and amplify each one of these areas, and they can even help you put out fires before they spread. But if your building is already 90% gone, it might be best to cash in your insurance policy and rebuild.

Online strategy should be CRAFTed before the fire starts.