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What do you get for your digital marketing dollars? Figuring 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 Inc., a research firm based in Burlingame, California, "they need more accountability."
Tourist interaction: “The Best Job in the World” campaign for Australia’s reef islands resulted in 34,000 online video applications and 8.5 million website visits over six months. Accountability becomes even more urgent when you consider the numbers. In 2010, for the first time ever, spending on digital media will surpass print media in the U.S., Outsell forecasts. The $120 billion that companies are shelling out this year includes all digital advertising and marketing efforts, including web site 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 television. 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. We've searched the globe to discover innovative campaigns that have worked. These two case studies represent only two strategies for breaking through the clutter, but they highlight a big trend--that it's now possible to engage an online audience in novel ways that deliver measurable returns. Each vignette looks at the challenges faced by the marketer, 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 web site, despite being 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 pepperoni, mushrooms and other topping icons 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," that 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 received 100,000 downloads. Within three months, iPhone users ordered $1 million worth of pizza. Niccol describes the app as "game-changing." The app now has millions of users across 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.
Smart pizza: Pizza Hut’s iPhone app generated $1 million in food orders within three months and a million downloads of the app within eight months. The Best Job in the World: attracting tourists to little-known lands down under
The Great Barrier Reef off the east coast of Australia has long been a famous magnet for scuba divers from all over the world. But the Tourism Queensland agency felt there was potential to also develop the archipelago of islands near the reef as a prime tourist destination in its own right.
At the agency, a team led by CEO Anthony Hayes sifted through market research that showed their best target audience were young "self-challengers" with a high level of education, a penchant for technology and a preference for holiday destinations off the beaten track. They needed to reach out to these go-getters across key international markets--and to engage their interest they'd need a really compelling hook.
In January of 2009, the agency hired the digital marketing firm Cummins Nitro, now part of Sapient, to start a global online recruitment race for "the best job in the world," an advertising campaign that would be run more like a reality show. The new position as Island Caretaker would come with a generous six-month salary of AU$150,000 (about US$144,000), plus luxury accommodations. As part of the job, the caretaker would experience everything the islands had to offer as a holiday destination. The winner would then report his or her experiences to the world through the associated blog, online video and other social media channels.
News of the opportunity spread quickly online and was picked up by traditional offline media channels. The response was so overwhelming that the agency's server crashed for a short time. The agency received more than 34,000 online video applications from 195 countries. Fifty applicants were shortlisted, and those were whittled down to sixteen candidates who were flown to Queensland for the final selection process.
A 34-year-old Englishman named Ben Southall emerged victorious and won the contest, with the news garnering a spot on the Oprah Winfrey Show. All told, nearly 8.5 million visitors flocked to the website, well surpassing the pre-campaign target of 400,000, and visitors spent an average of 8.22 minutes each on the site. More than 530 hours of user generated video was created and discussion was rampant across blogs, social networks and traditional media channels worldwide. Despite the down economy, tourist bookings to Hamilton Island, the campaign's main destination, shot up 25 percent for the year.
Pizza Hut and Tourism Queenland launched two utterly different campaigns, for two completely different products, on different technology platforms. But they both used digital channels to devise innovative ways of engaging with their brands. Both campaigns had a built-in attention-grabbing factor that broke through the online clutter.
Both campaigns also succeeded by integrating multiple channels, blurring the lines between digital and traditional media--leveraging online buzz to drive mass media exposure that in turn compelled people into action.
Damian Ryan and Calvin Jones are the authors of The Best Digital Marketing Campaigns in the World: Mastering the Art of Customer Engagement (Kogan Page, 2011)
Steve Jobs at iAd's unveiling. Apple is withdrawing from its ad network business that places ads across multiple mobile platforms in favor of concentrating on its iAd network that works only on Apple devices. The company has notified advertisers and developers that it is no longer accepting campaigns for the Quattro network and will cease running mobile campaigns through Quattro on Sept. 30. The ad network ran campaigns that stretched across several mobile platforms, including rival Android. "We believe iAd is the best mobile ad network in the world, and starting next month we're going to focus all of our resources on the iAd advertising platform," Quattro states on its Web site. Instead, Apple is committed to building iAd, a platform for iPhone applications. Apple has slowly rolled out iAd, with The Wall Street Journal reporting delays in getting campaigns up and running, which some agencies peg on Apple's penchant for control. Apple's love of control likely fueled the decision to abandon a large-scale mobile ad network in which Apple couldn't guide the entire experience. The move also addresses the problem of operating iAd, which charged $10 CPMs and $2 CPCs, alongside Quattro's far lower rates. "[Apple] is typically a niche player and they're positioning themselves as that," said Paran Johar, CMO of Jumptap, an independent rival mobile ad network. "They're focused on the ultra high end. They're the abandoning the performance side of things." Apple paid $275 million for Quattro early this year. The move to enter the ad business came after Google released its rival Android OS and bought mobile ad net AdMob. Apple's rationale for owning an ad network was to provide developers with options, other than straight sales, to make money from apps they build for iPhones and iPod Touch devices. Apple CEO Steve Jobs, at the unveiling of iAd, promised the placements wouldn't "suck" like other mobile ads. Apple is reportedly asking for $1 million commitments to run iAd campaigns. Shutting Quattro will provide a boost for other mobile ad networks, including Google-owned AdMob and independent networks Jumptap, Crisp Wireless and Millennial Media. The Wall Street Journal yesterday reported Apple rival Research in Motion, maker of the BlackBerry, has negotiated to purchase Millennial.
Mobile search could grow from 9 percent of all queries this year to 20 percent by 2012, estimates RBC analyst Ross Sandler in a new report issued today. There is still a huge gap between mobile’s share of overall search queries and its share of search advertising. Sandler estimates that mobile will still represent less than 2 percent of search ad budgets this year, compared to the 9 percent overall share. But he thinks that gap can narrow and that mobile search advertising can be a $2 billion to $3 billion market in 2012. His assumptions seem a bit aggressive on the ad revenue side. There might always be a gap between mobile search share and mobile search ad spending because of the relative effectiveness of search ads on PCs versus on mobile phones. But Sandler does a deep dive into mobile search advertising and comes up with some compelling reasons why that gap should at the very least begin to narrow just as mobile search starts to take off thanks to the growth of large touchscreen devices such as the iPhone, iPad, Android, and Blackberry.
One big advantage the new generation of smartphones have over PCs in terms of search advertising is that the screen real estate devoted to search ads is much bigger. A single search ad on a PC takes up about 4 percent of the screen real estate, whereas a single search ad on a smartphone takes up about 20 percent of the screen. The relatively larger size of the ads results in higher click-through rates on mobile (as much as 3 to 5 times as much). On the iPhone, one search ad takes up 22 percent of the screen, and if two search ads are served up it takes up nearly half (48 percent). For Android, those numbers are 18 percent and 38 percent for one and two search ads, respectively.
Sandler tested the same keywords across different devices (an iPhone, Android Nexus One, Blackberry, and aPC), and found that the average, for both the iPhone and the Nexus One, was 1.1 paid search results per query, compared to 9.2 search ads per query on a PC. Searches on Blackberries showed hardly any paid results.
Another key driver for mobile search revenues should be the growth of local ads. Sandler found that the ratio of localized or geo-targeted ads to non-local ads is still low and expects that to grow as advertisers learn how to geo-target their search ads. Geo-targeted ads should also perform better, leading to higher mobile search ad revenues.
So how many people actually conduct searches on their smartphones? According to comScore, half of all smartphone owners conduct at least one search per month, 20 percent search once a week, and 11 percent search almost daily (which is about the same as the percentage of people who search on feature phones every month).
This year, Sandler estimates there will be 374 million people with smartphones, increasing to 766 million in 2012. Consequently, the number of smartphone searches will grow from 157 billion to 586 billion (up from 35 billion two years ago). The comparable number of searches on PCs this year will be 1.3 trillion, growing to 1.6 trillion in 2012. Any way you look at it, mobile searches will become a significant portion of total searches within two years. But how much will those searches be worth? That is still a guessing game at this point.
