Are Red Lobster and Olive Garden about to try fixing what might not be broken?
The Orlando Sentinel’s Sandra Pedicini, one of the best reporters covering the restaurant industry in the country, had a great story this week about a coming shift in Darden Restaurants’ marketing strategy. The parent to Red Lobster and Olive Garden — as well as LongHorn Steakhouse and its Specialty Restaurant Group that includes Yard House and Seasons 52 — reportedly will allocate more of its marketing spending toward digital and social platforms and start scaling back its television advertising.
Finding the right marketing mix is more art than science for a lot of companies, and without knowing Darden’s actual return on investment for digital marketing versus traditional TV advertising, I’m no more qualified than anybody at the Orlando, Fla., headquarters to judge how sound a strategy that might be.
Certainly, Red Lobster and Olive Garden do a pretty good job getting engagement in the form of likes and shares on Facebook or replies and retweets on Twitter. When chief executive Clarence Otis said in a conference call that more digital marketing would “enable us to have much more robust one-on-one conversations with guests,” he’s absolutely right.
“As those scale up,” Otis said, “we would expect our television marketing expenses to scale down dramatically.”
What gives me pause as an observer of restaurant marketing, however, is the fact that Darden’s major casual-dining brands do a good job of reaching a mass audience.
For example, LongHorn was named the “brand of the year” in the casual-dining restaurant category by Ace Metrix, an advertising research firm that ranked every commercial in the space based on consumers’ ratings for how watchable and persuasive the ads were. (Note: Baskin-Robbins won “brand of the year” for the quick-service restaurant category.) In several quarterly reports last year, Ace Metrix found that Olive Garden and Red Lobster also performed well standing out from other restaurant advertising.
In another study by Adweek, Olive Garden scored the No. 7 most-watched advertisement on YouTube for the month of December, registering more than 2.8 million views for its commercial for the holidays — which also contained a plug for the $6.99 Unlimited Soup, Salad & Breadsticks Lunch.
Yes, same-store sales at Olive Garden and Red Lobster fell again in Darden’s most recent quarter, including a 4.5-percent decrease at Red Lobster, which is now on the block for a sale or spinoff. When that happens, it’s natural to re-examine everything, especially marketing.
But it appears to me that the marketing’s reach is not so much the problem as perhaps the offers being promoted or how they’re being advertised. Millions of viewers are seeing and remembering Darden’s TV commercials, and both Red Lobster and Olive Garden are garnering tens of thousands of likes for some of their Facebook posts. Is the creative getting tired? Are offers like Endless Shrimp or the Never Ending Pasta Bowl getting stale?
Pedicini’s article quotes another smart reporter, Ad Age’s Maureen Morrison, who said, “It’s not as easy to reach people in their teens, 20s, 30s even, through a single TV campaign any more.” I totally agree, which is why, when Darden appears to be doing a better job than most brands accomplishing the reach part of the marketing equation, it seems counterintuitive to me that the company would pull back from a medium in which it succeeds.
Perhaps there are changes brewing in the creative side of the equation as well. I find myself watching Darden often — I’m still glued to my TV for hours a night — so I guess I can keep an eye out for more developments this year.