When Digital Marketing Actually Works

What do you get for your digital-marketing dollars? Figuring out 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, a research firm based in Burlingame, California, “they need more accountability.”

Accountability becomes even more urgent when you consider the numbers. In 2010, for the first time ever, spending on digital media will surpass spending on print media in the United States, Outsell forecasts. The $120 billion that companies are shelling out this year includes all digital advertising and marketing efforts, including website 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 spending on television advertising. 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. These two case studies described here represent only two strategies, but they highlight a big trend–that it’s now possible to engage an online audience in novel ways that deliver measurable returns. Below, we look at the challenges faced by these two marketers, 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 website–even though it’s 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 icons representing pepperoni, mushrooms, and other toppings 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”: 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 was downloaded 100,000 times. Within three months, iPhone users ordered $1 million worth of pizza. Niccol describes the app as “game-changing.” It now has millions of users on 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.

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 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 showing that the best target audience was young “self-challengers” with a high level of education, a penchant for technology, and a preference for holiday destinations off the beaten track. It needed to reach out to these go-getters across key international markets–and to engage their interest, it would 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.” The new position of “island caretaker” would come with a generous six-month salary of $150,000 in Australian dollars (about $144,000 in U.S. dollars), plus luxury accommodations. The caretaker would experience everything the islands had to offer as a holiday destination and report those experiences to the world through a blog, online video, and other social media.

News of the opportunity spread quickly online and was picked up by traditional media channels as well. 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 16 were flown to Queensland for the final selection process.

A 34-year-old Englishman named Ben Southall emerged victorious, and the news won a spot on The Oprah Winfrey Show. All told, nearly 8.5 million visitors flocked to the website (well surpassing the precampaign 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 weak 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 and, blurring the lines between digital and traditional media, leveraging online buzz to drive mass-media exposure that in turn inspired people to 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)