Restaurants reach consumers through streaming media

Netflix, Hulu, Pandora and Spotify have been great for consumers looking to customize their entertainment platforms — and bypass traditional commercials — and equally challenging for restaurant marketers looking to get their messages noticed in an increasingly fragmented media landscape.

But a growing number of brands, among them Noodles & Company, White Castle, Pizza Hut and Domino’s Pizza, are meeting with success as they experiment with banner ads and short audio commercials on Pandora or partnerships with Xbox Live and MLB.tv.

Dallas-based Pizza Hut introduced an ordering application in April that lets gamers on the Xbox Live network create and order a pizza with their controllers and have it delivered to their homes, without having to stop playing their games.

“It’s amazing how, once you train people to try something new and it becomes part of their behavior, it becomes really ingrained,” said Doug Terfehr, spokesman for the 13,000-unit chain. “There was a spike in usage at the launch of the app, and the usage since has been relatively consistent.”

In July, Ann Arbor, Mich.-based Domino’s executed its DomiNoNo offer with users of MLB.tv, Major League Baseball’s online streaming service that lets baseball fans watch all 162 of their favorite team’s games. Because the offer was a giveaway of 10,000 free pizzas after the first two no-hitters of the baseball season, Domino’s did not have sales figures to track for the promotion, but spokesman Chris Brandon called it “a win all around for MLB.tv, Domino’s and baseball fans.”

The chain of nearly 5,000 domestic restaurants reported that its social media impressions increased dramatically during the first four months of the baseball season, not just during the no-hitters thrown by Cincinnati Reds pitcher Homer Bailey and San Francisco Giants pitcher Tim Lincecum. Any time a pitcher got close to a no-hitter, fans hoping for their pitcher to pull off the feat — or just hoping for free pizza — used the #DomiNoNo hashtag to build awareness.

Elsewhere, White Castle and Noodles both tried out advertisements on streaming radio site Pandora this past summer.

White Castle, which has more than 400 hamburger restaurants in 12 states, promoted its Grilled Chicken Sliders with a mobile banner ad on Pandora’s smartphone app. A “learn more” button loaded a mobile optimized Web page where viewers could find out information on the sandwiches, locate the nearest White Castle and sign up to be in the

Columbus, Ohio-based chain’s e-mail club.

Broomfield, Colo.-based Noodles debuted its first branding campaign, “Your World Kitchen,” in April and included a banner ad that popped up when a Pandora user opted to listen to “world music.” The ad read, “Based on your selection, we think you would like Japanese Pan Noodles.” The fast-casual chain of more than 300 locations declined to comment on further specifics of the ad campaign.

Catching them midstream

Veteran restaurant marketer Tim Hackbardt called Pizza Hut’s Xbox Live app an intelligent strategy, as it offers a seamless way to order in exchange for customer data.

“Gamers eat pizza, and they don’t want to quit the game, so it’s a convenience for them,” he said. “It usually results in a database capture, and these gamers would want to hear more from Pizza Hut, participate in surveys or keep their accounts to order again conveniently.”

That is precisely what has happened through the first few months of the Xbox Live app, Terfehr said. Importantly, 11 percent of the people using the app had never interacted with Pizza Hut previously, he added.

“Those orders were coming from a new e-mail address, phone number or street address,” Terfehr said. “It’s shown that what was normal in ordering pizza is no longer normal. People expect to be able to do everything and anything, and gaming will drive that forward.”

Pizza Hut is not doing much to promote the Xbox Live app in wider broadcast or social media, Terfehr said, but its word-of-mouth among gamers is driving new adoption.

“Where we’re getting the most attraction is that it’s one of the common ads that come on when you turn on Xbox Live,” he said. “Keeping it in the gaming environment keeps it top of mind.

“Another interesting trait of this is the consumers often repeat the same order and don’t try new specials or deals,” Terfehr added. “That’s a much higher skew than our other digital channels, where people tend to go for variety.”

Content still crucial

Marketer Hackbardt, who most recently was chief marketing officer of Johnny Rockets, said brands are right to try out ads on services like Hulu or Pandora, but he noted that the way those platforms fragment how viewers get their media presents as many challenges as opportunities.

“You have a lot of experimentation right now, but you also have deterioration of reach,” Hackbardt said. “We know we’re losing TV viewers or radio listeners because there are streaming services. With so many mediums, it is diluting the ability to reach a lot of people to tell our story.”

A September report by Parks Associates, drawn from the firm’s first-quarter survey of 10,000 U.S. households with broadband Internet access, found that 44 percent of broadband homes subscribe to some kind of online video service like Netflix, Hulu Plus or Amazon.

A separate report that month from Altman Vilandrie & Co., however, found that only 5 percent of consumers watched online video exclusively and did not subscribe to a cable TV service. However, since 2010, the trend of “cord shaving” doubled to 26 percent of consumers, who report they have cut back on such paid services as cable companies’ video on demand and have supplemented with online viewing.

When advertising on audio streaming services, marketers should consider carefully whether to pay just for a banner ad or spring for an interstitial audio commercial, Hackbardt said.

“It’s helpful to have a banner ad go across the whole landscape on the desktop version [of Pandora], but the percentage of people using it on mobile is huge,” he said. “If I’m listening to Pandora on my phone while I’m running or in the car on Bluetooth, I’m not seeing your ad.”

The chances of a database capture increase the more an ad gets shared or talked about on social media, he added, which requires marketers to come up with a breakthrough piece of content. He pointed out that nothing fundamentally changed about the product for Old Spice deodorant or Dos Equis beer, but the popular ad campaigns starring the Old Spice Man and the Most Interesting Man in the World, respectively, made those brands cool again.

“If users opt in to a database, and if they share this message to multiply it for us for free through their friends, that’s where the ‘compound interest’ happens,” Hackbardt said. “The more entertaining and interesting the ad is, the more people will like it, and that’s not going to change. How we use these new channels of distribution to develop content will be very much the barometer for how successful advertising on streaming media will be.”