When Pizza Hut first announced its “Transformation Agreement” in 2017 to turn around declining sales trends, advertising was a big part of the deal. Yum Brands’ $130 million investment included $25 million in media spending in 2017 and $12.5 million in 2018.
Further, as part of the agreement, franchisees made a permanent commitment to spend more on advertising.
Two years in and we’re starting to see exactly that means. For example, Pizza Hut inked a multi-year NFL sponsorship deal last year–ending Papa John’s eight-year reign–on top of its NCAA sponsorship deal, which continues through the 2020-2021 academic year.
This new opportunity for Pizza Hut cannot be overstated. About 16.5 million people tune into a typical NFL game on any given Sunday, according to ESPN. That is as captive an audience as it gets here in the football-obsessed U.S. Thirty-seven percent of American adults identify football as their favorite sport to watch, followed by basketball, at just 11%.
But Pizza Hut’s marketing focus extends well beyond sports. About a year and a half ago, Pizza Hut enlisted the help of RQ, a self-described relationship marketing agency, with a goal of inserting the 61-year old pizza brand into cultural moments and conversations.
In doing so, Pizza Hut was looking to not only earn more coveted earned media impressions but also build brand sentiment across a variety of pop culture-inspired opportunities. Through the partnership, for example, Pizza Hut served its food to TV and film writers and installed Pizza Hut Lounges at the 2018 Country Music Association Awards, the Sundance Film Festival and Comic-Con International.
Perhaps the best-known activation from the RQ partnership came when Pizza Hut sent Jimmy Fallon and his staff pizzas and a members-only jacket after the late-night host mentioned the brand during his opening dialogue on “The Tonight Show.” Fallon promptly thanked Pizza Hut via Twitter and posted about the jacket on Instagram Stories.
Why does some frivolous social media post by a comedian even matter? Because Jimmy Fallon shared the feel-good sentiment about Pizza Hut to his 51 million Twitter followers and his 11.3 million Instagram followers–all without the pizza brand paying a dime.
Any restaurant chain can sponsor an ad. It’s this type of earned media that is king. In fact, 92% of global consumers trust earned media above other forms of advertising, and word-of-mouth drives anywhere from 20 to 50% of consumer purchase decisions.
According to Sarah Beddoe, Pizza Hut’s vice president of marketing, the timing is right to focus on such cultural relevance.
“We know that today’s consumers want brands that understand who they are, know what they stand for and interact with them as a friend would, and we strive to make those authentic connections with our fans through every touchpoint–from a social post to a party at Sundance,” she said.
Authenticity cultivated by influencers is a major thing right now. One study finds that 94% of marketers who use influencer marketing find it to be an effective practice, and influencer marketing can generate up to 11 times the ROI of traditional advertising. Further, Nielsen found that 84% of consumers trust recommendations from friends, family and influencers over all other forms of marketing.
Because of this, Beddoe said Pizza Hut has been “laser focused” on generating awareness with new audiences and winning new customers through strategic partnerships that keep the brand top of mind during key cultural moments, from the Super Bowl to South by Southwest.
The likely target here is younger consumers, who are quickly gaining a tremendous amount of spending power.
“This generation interacts with brands differently, so establishing genuine relationships with influencers is extremely valuable as we look to connect with them,” Beddoe said. “This focused effort looks to continue to build our credibility within the cultural zeitgeist and drive continued awareness through referrals and word-of-mouth channels online and offline, both of which we know are increasingly important to millennial and Gen Z audiences.”
Indeed, according to Madison Bregman, founder and CEO of youth marketing consulting firm GirlZ, younger consumers in particular look for a somewhat accessible connection—influencers who retweet them or explain to them on YouTube why a brand is worthy of their time, for example.
“Influencers are one of the best ways to reach our generation if it’s done right. Brands that ingrain themselves into youth culture in authentic ways, through coolness and relevance, will be the ones we pay more attention to,” Bregman said.
So far, Pizza Hut’s efforts here seem to be paying off. The brand has experienced an improvement in sales–Q1 was flat compared to negative 7% when the transformation agreement was implemented. And, since launching this work with RQ last year, Pizza Hut has generated 1.7 billion impressions and steady growth on social media, especially Instagram, the fastest-growing social platform. Pizza Hut now has 1.5 million Instagram followers–more than both Domino’s (1.4 million) and Papa John’s (440,000), as well as its heavy pop culture-minded sister brands KFC (1.4 million) and Taco Bell (1.2 million).
While social media fans don’t automatically translate into paying customers, there is a strong correlation between the two. Forty-five percent of U.S. diners have tried a restaurant because of a social media post from the establishment, for example, while 74% of customers who actively follow and engage with restaurant brands on social media said they’re more likely to visit or order food from those establishments.
Pizza Hut plans to build on this momentum and further expand its brand presence within entertainment channels. Talent-oriented events in particular have been a successful way for Pizza Hut to grow its network. Beddoe added that there are also discussions about further folding brand advocates into marketing strategies.
“These real-life touchpoints let us make authentic connections and build real relationships. They’re also a great way to put a face to the Pizza Hut brand name for a lot of these people, and help build the loyalty that we’re after,” Beddoe said. “We want to say relevant and distinctive, especially in today’s marketplace, in helping a new generation to create those moments that matter.”