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Digital Parents Opps: Darden Restaurants increases digital display, continues investing in smaller brands (Score 50)
Following its plans to Darden Restaurants, parent company of restaurant giants Longhorns and Olive Garden, continues to use promotions, discounts and TDIs "in unison" for an integrated strategy," per the Q2 2020 earnings call. Current marketing plans involve changing Olive Garden's promotional messaging and reducing marketing spend; Olive Garden has delivered 21 consecutive quarters of same-restaurant sales growth, so sellers will likely find the most spending dollars available for this brand.
Cheddar's increased its media spend and used a "variety" of channels to increase brand awareness. This brand is particularly excited about its free-upon-visit honey butter croissants, which, I mean, who wouldn't be? Since this brand is in the "early stages of learning," we can expect its strategy to shift quite frequently over the coming quarters. It's cafe-centric, so millennials are likely the primary targets--we're very susceptible to frequenting places with free baked goods. LongHorns has reportedly been investing in its bread business for a while, as well; readers may see more campaigns about bread for several brands in the future, I suppose, and pushes accentuating Darden's "value...across the platform."
Executives referred to this year's spend as "unfavorable to last year." This insinuates coming shifts in spending; spend decreased YOY for LongHorn. LongHorn marketing and a shift in timing from first to second quarter was part of the issue, as was the elevated Cheddar's spend. LongHorn's beef section has faced slightly high inflation; as stated on the call, LongHorn continues to have "slightly elevated beef inflation." Take that as you will.
Lasagna Mia, a create-your-own lasagna special at Olive Garden, did not perform "as well as [Darden] had hoped." We may see a cut back on promotions and more of a focus on the quality of Darden's food as a result. But, as it continues to salvage its brands, we will continue seeing Darden targeting millennial foodies and penny pinchers with discounts and deals such as this. In time, it might shift farther from TV and rely more on digital display.
Executives on the call claimed Yard House "made the most progress" in Q2 2019. We may see other brands shift toward Yard House's marketing strategy in the future. This brand, per Adbeat, cut digital display spend in half YOY, and it doesn't traditionally invest in national TV, according to iSpot.
See the graph below for further spend details.
|Digital Display||National TV|
|Brand||Jan 2019 - 2020||Increase / Decrease||Jan 2018 - 2019||Top Networks||Top Publishers||1/1/2019 - 01/01/2020||1/1/2018 - 1/1/2019||Increase / Decrease||Top Shows|
|LongHorn Steakhouse||$34,500||-70%||$98,500||Direct Buy ($19,600)||clarkscondensed.com, ap.org, uproxx.com, healthyway.com and lyrster.com||$259,013||$0||+100%||Click|
|Yard House||$20,100||-50%||$40,000||YouTube ($10,600)||youtube.com||x||x||x||x|
|Cheddar's Casual Cafe||$317,400||+2305%||$13,200||YouTube ($314,700)||youtube.com||$0||$0||x||x|
|Eddie V's Prime Seafood||$445,000||+23321%||$1,900||YouTube ($440,600)||youtube.com, theweathernetwork.com, webdunia.com, calcuworld.com and theguardian.com||x||x||x||x|
|The Capital Grille||$829||-74%||$3,200||Other ($421)||thekitchn.com, yourdailydish.com and petapixel.com||x||x||x||x|
Sellers -- Offer digital space targeting millennial discounters and young families. Olive Garden and LongHorn should also draw in a Gen X crowd, particularly through TV. Expect more cutbacks on spend for most brands, but Olive Garden, LongHorn and Cheddar's may continue spending more highly on digital channels.
Agency readers -- An account of this size is usually at least slightly vulnerable. Given Darden's struggles, you may have more of a chance. There's no harm in getting on its radar for potential opportunities. Accounts with top brands are as follows: Olive Garden is partnered with creative AOR Brunner.