Frances Allen, chief marketing officer at Denny’s, discusses why she’s picky when choosing movie sponsorships—such as the recent Arthur Christmas tie-in—how she feels about the economy and why her brand isn’t returning to the Super Bowl this year.
Adweek: What has Arthur Christmas done for Denny’s?
Allen: The kids’ products have resonated very well. They’ve sold very well in the restaurants. And we needed to get a little of our kids' pester power back. Also, the theme of the movie is just so charming, so all-family and so Denny’s-like.
Have sales of the menu items exceeded expectations or were they about what you expected?
They exceeded. We changed over to the holiday menu around the 10th of November and that module ended at the end of December. So, it was a seven- or eight-week window that covers both the holidays. The movie came out right before Thanksgiving.
Denny’s last movie tie-in was with Madagascar in 2005. Why only two movies in six years? Is it an expensive proposition or are you just picky?
The latter. Coming from Pepsi, I have a long history of movie tie-ins and the ones that work well are the ones that absolutely tap into your brand DNA. Any kind of other borrowed equity is just that, and it only does as well as the movie does. And these days relying on a movie to do really well at the box office is a little like playing the lottery in that it might only be successful for two or three weeks.
Denny’s was on the Super Bowl in 2009 and 2010, but not last year. Did you consider it this year?
If you have a purpose for being in there, it’s great. It’s the most expensive airtime and I don’t really see the ROI for it. It’s wonderful to have your ad talked about the next day and some people get great media out of that. But we’ve got a full year to support and blowing such a huge proportion of the budget on one spot—it’s rarely the right decision.
Is your $2-4-6-8 Value Menu an example of how you’ve responded to the economy?
Yes. Our guests are working class. They cover all life stages, all demographics, all ethnicities, but they’re working-class people. So, if they don’t have jobs, they’re not taking families out to a restaurant chain. They’re just not doing it. So, the whole industry has been impacted by that, particularly the mid-scale family-dining industry, which has been squeezed by fast food and fast casual on either side. People have way more options and the consumers are losing their jobs. So, the working class—our guest—has been impacted by the recession—I’d say financially and psychologically, which is part of the rationale behind the [current Denny’s] positioning. . . . Two-four-six-eight has been really important in terms of giving them the ability to come in as often as they used to. In fact, one in five people coming into Denny’s are coming in for the 2-4-6-8 Value Menu.
Was that meant to be a short-term proposition?
It was always meant to be long term. What we have done is we have found a theme for a value menu that doesn’t wear out, that can reinvent itself across different dayparts. And it can apply to a full dinner or just an add-on quick snack. So, it’s very flexible, great value and resonating really well with guests. This will be with us for a long time. I don’t see this recession going away any time soon and 2-4-6-8 is now a branded and very catchy menu name that I think Denny’s owns. So, we won’t give that up too easily.
What economic indicators are meaningful to you?
Unemployment—huge. Gas prices—very significant. Those are the two main ones.
How are you feeling about the new year?
We feel very optimistic about the strategy that we have, the alignment that we have with our franchisees. We understand what works. We understand what’s resonating with our guests. That’s huge for us going into 2012 and the whole organization is lined up behind it. I think where we would feel less optimistic is the outlook for our guests. So, we’re pretty closely following where the economy is going. Unemployment is improving a little bit, which is giving all of us some comfort. But ultimately, it’s still at 8½ percent, which is still very high. So, we anticipate that things aren’t going to get much easier for our guests and our competition is going to ratchet it up this year as well on the value front. So, those factors make us cautious about 2012, but we’re bullish about what we’re doing.
Last year, there was leadership turnover at Gotham, your lead creative agency, with Peter McGuinness and Lyle Tick leaving. How did you feel about that?
As long as the work is great, I wish them well, really. And Gotham has been terrific. [President] Nick Johnson is doing a tremendous job over there, and [chief creative officer] Marty [Orzio] is just a wonderful creative partner on the brand. So, they haven’t missed a step in terms of servicing our business. That to me is what matters.
So, you feel confident in them?
Yes. In fact, we awarded them our social media [business] back in February as well. They won our traditional media in August 2010. We have made them our social media agency in 2011 and they’ve done a tremendous job in that. Our Facebook [fan base] is up nearly 200 percent and our Klout score is in the top 95th percentile. No. 1 in engagement on Facebook as well, which is testament to some of the innovation and creative ideas they’ve brought to us. “Always Open”—the webisodes—was an idea that came from Gotham. Our cheesy radio station and our cheesy pickup lines—we’ve just done a lot of fun things that are really getting us noticed by the next generation of Denny’s users.
Which social media platform has been most beneficial to you?
The "Always Open" webisodes—the creativity, the freshness of that and the riskiness of that. It was on our own site and we put it on CollegeHumor and it has gone viral from there. It really drove the YouGov brand index scores among millennials. It has been extraordinary. . . . So, I’d say as a one-off idea that has garnered us a lot of credibility, freshness with the youth and media attention. As a communication platform with our real loyal guests—Facebook.
Compared to last year, is your 2012 media budget a little bit more? About the same?
We will need to spend a little bit more. With TV cost inflation in double-digits, I actually think Optimedia has done a great job of negotiating for us for 2012. But it’s still significantly more expensive than in 2011 and we always want to be doing and testing new things. Even the webisodes—it doesn’t come cheap. With all the social media experimentation, traditional media works in our business. It’s important that we continue to communicate with guests within an hour or two of when they’re going to eat. That’s the thing about the restaurant business—you don’t advertise to them and have them make a decision a week or two later. It’s immediate, so it’s really important that we maintain a continual presence.