Foursquare, pizza and smart PR

As a devotee of communications ROI, a report published last week really caught my eye:

Domino’s Pizza has attributed strong growth in online sales to its use of promotions on location-based mobile application Foursquare and social media after revealing a 29% surge in pre-tax profits to £17.5m…. sales in its e-commerce unit had grown by 61.4% in the period and that online sales now accounted for 32.7% of overall UK delivered sales.

These is so much in there that should make UK digital marketers sit up and take note, it’s difficult to know where to start. As commenter Mike Mathieson says:

Too often the best examples like Jet Blue, Starbucks, Dell, Kodak etc are US orientated… Finally we have an excellent UK example of a direct business return from social media.

Well, maybe.

For those with an aversion to the-next-big-thing, Foursquare is a location-based networking/microblogging tool accessible via mobile browsers and apps. According to its own website, it’s “your favorite, er, mobile + social + friend finder + social city guide + nightlife game thing.”

Foursquare’s networking-as-a-game approach, combining the real-world and the virtual, looks like a winning one. The service is, by all accounts, growing rapidly, and that growth is accelerating: @foursquare tweeted the news that it had reached a million users on April 23rd, and, just three months later, has reportedly doubled that.

Two million is a lot of people – but it’s also the size of a strong British daytime television audience. I’ve not been able to find numbers for the UK, but even 33 Digital PR and digital enthusiast Drew Benvie admits that British “growth is still rather modest”.

Then there’s the timing. Domino’s results are from the 26-week period to the end of 27 June this year. Domino’s Foursquare tie-in, in which every “check-in” (visiting a Domino’s) is rewarded with a free sidedish, and the ”Mayor” (the user with the most check-ins), gets a free pizza, launched in May. No doubt this is good marketing – but enough to significantly impact the bottom line in the last six weeks of the reporting period?

Foursquare identifies 50 Domino’s outlets (or “venues”, as it terms them) in the London area, of which almost all are taking part in the promotion. Foursquare provides you with the number of people who have visited each and the total number of check-ins.

One way of interpreting this data is as a pizza map of London, which would make Shepherds Bush (27 users, 168 check-ins) the city’s cholesterol-heavy heart. I was strangely proud to see that Hackney, where I live, is home to the most check-ins per user.

If we (generously) assume each check-in represents a purchase of £40, Domino’s Foursquare promotion has so far shifted almost £60,000 worth of pizzas in the London area. Now this would undoubtedly constitute a significant chunk of revenue – but even if we accept the Foursquare link is causal rather correlative, it’s still just 0.0003% of the total revenues for the period. Yes, these calculations are just for London (though it’s safe to assume Foursquare is more popular in the capital than elsewhere in the country), and yes, it’s just the last six weeks – but it seems a stretch to talk about FourSquare making the difference.

And look again at the link Brand Republic makes to ecommerce. Foursquare relies on location-based check-ins, so to take advantage of the offer users must visit the outlet. If anything, the Foursquare promotion should undermine ecommerce performance.

There is one place the campaign does have clear benefits: the pages of Brand Republic – or Marketing Week, or New Media Age, or Mashable. Attributing success to an on-trend service generates column inches. Indeed this seemingly auxillary benefit should be considered a core part of the FourSquare tie-in. As Drew B also notes,

it’s not the community’s sheer size that matters. It’s the buzz. Foursquare is written about daily in the PR and marketing media, so it naturally follows that brands are seeing it as the new way to engage.

In short, even if the audience isn’t there yet, the marketers are – and reports of Domino’s success increase that momentum.

“It is easy to try and attribute our success to one thing – be it the weather, or Britain’s Got Talent, or the World Cup – but the underlying trend shows a more compelling picture,” Domino’s CEO Chris Moore said of the results.

It is indeed easy – and if that “one thing” is a hotbutton topic, it’s also smart marketing.