Costello Aims To Brew Better Marketing Mix

Keeps Dunkin’ ahead in shifting media environment

It’s John Costello’s job to make sure that “America Runs on Dunkin’.” Named chief global customer and marketing officer of Dunkin’ Brands last November, Costello is a veteran brand builder who has worked in top marketing posts at Home Depot, Sears and Yahoo. In the first of a new series of CMO interviews, Costello talks to B&C Business Editor Jon Lafayette about Dunkin’s marketing challenges and the changing role media has played in addressing those challenges.

Upfront TV advertising costs rose again this year. Are there any signs that the value of TV to a marketer is increasing?
TV remains a very important medium for reaching customers. Significant cost increases are always a challenge, and put a higher price on making sure that our buys reach the right target customer group and are effective.

Is anything happening that increases the value and effectiveness of TV?
TV buys that offer the opportunity for product tie-ins and greater localization always have greater value. Like everyone else, we’re focused on making our marketing dollars work harder, so we’re inclined to shift our funds to those TV partners that can help us gain the most effectiveness.

In terms of measuring effectiveness, how close have you come to figuring out how many cups of coffee a particular commercial sells, or how many people are driven to a store? Does that have to become more precise?
Tools for evaluating effectiveness are getting better every year. We use a combination of analytical tools as well as sales results to evaluate the various media we invest in. QSR [quick serve restaurants] is a very responsive category, so we know very quickly whether our marketing programs are working as effectively as we’d like. We also work with sophisticated partners like the Hudson River Group to analyze the relative impact of various media and marketing programs.

Are there other forms of video that are becoming important as marketing tools?

The Internet and particularly social media are growing in importance, especially as streaming video becomes more common.

What can streaming video do that traditional television can’t?
Streaming video can offer a degree of personalization and interactivity that can be appealing to a number of customers. Smartphones are also becoming an increasingly important medium as applications, interactivity and video capabilities improve.

As a retailer, what kind of impact does the economy have on your business, and how does that in turn impact the way you decide to spend your media dollars?
Dunkin’ has been performing very well in the current economy, but it’s putting a premium on marketing productivity and making every marketing dollar work harder than ever before. We work with our franchisees to build brand differentiation and drive sales as efficiently as possible. Significant price increases can make broadcast look less attractive than other marketing programs.

I think consumers want value more than ever before, which puts a premium on finding ways to make every aspect of our business more efficient, including marketing and advertising.

Have you ever dreamed that a vendor would come walking through your door with the perfect marketing tool? What would that perfect marketing tool be?
I think the perfect marketing tool would combine the interactivity of social media with the broad reach of television at a very efficient price.

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