Seven pizzas a second: Domino’s CMO Adam Ballesty on pizza, purpose, channel mix and finding post-covid mojo after investors pummel performance
Adam Ballesty has just returned from Las Vegas and his global pizza peers; the marketing conversation was dominated by media mix modelling, media ROI, linear versus connected TV and franchisee angst over the universal challenges of rising prices, crunched supply chains and staff shortages. Ballesty spent most of his career building big brands at spirits business Diageo, with the luxury of time. Now he leads a team of 60 through the tail end of the pandemic and the pace is mind-boggling, he says. Food aggregators like Uber Eats and Menulog were non-existent three years on Domino's ledger but now are changing customer expectations and eating culture. Domino's still has some secret sauce though - it's own delivery fleet and first party data.
What you need to know:
- Adam Ballesty is 10 months into the role as Domino’s Chief Marketing Officer, and the experience has been one of pace and scale, he says.
- There are 863 Domino’s stores across ANZ, which made 107 million pizzas in 2021.
- One franchisee reached out to Ballesty recently to find out TV plans. When ads run on TV, that one business feels the pinch in staff.
- The Domino's app accounts for more than half of orders, and while Uber Eats and Menulog are changing eating culture, the company only uses its own drivers. It's more work but delivers a better experience for the customer and keeps the direct relationship unbroken, along with first party data.
- Domino’s is looking to ramp up its brand purpose, but not six-minute purpose videos. Streamlined messaging and practical changes are better.
- Ballesty says he has very strong competition from the likes of KFC and McDonalds, who have moved beyond price and promotion to “having a real lot of fun with the consumer in culture”.
- Ballesty says integration with new agency It’s Friday is going well and is settling down after a manic first few months. He didn’t want to be the new marketer who came in and up-ended agency alliances but deemed it necessary to achieve growth targets.
I had a franchisee reach out to me during the week in an email and he said, 'we used to get the TV schedules. Can you start resending them? Because on certain nights when you're heavy on TV and I'm understaffed, I feel the pinch.'
Delivering at scale and with pace
In the 10 months since Adam Ballesty joined Domino’s as Chief Marketing Officer, he has produced six major campaigns. That’s a new experience for Ballesty, a former Diageo marketing director and General Manager of non-alcoholic spirits business Seedlip. The “quick” in “quick service retail” is eye opening – Domino’s sells seven pizzas every second.
Ballesty is leading a team of about 60, including a strategy and insights division, and faces huge competitive challenges from fast food rivals, a post-Covid and post-lockdown slowdown, a growing food delivery aggregator market that is – quite literally – changing the structure of the company, all while looking to bake a new level of purpose directly into the Domino’s brand.
“We are testing and learning and prototyping and putting things in the funnel and concept testing and offers testing like I have never seen,” Ballesty says.
“So my first reaction to a question of ‘what's different’? It's absolutely the pace. And it's also the scale. You make one tweak to the website and you're changing conversion by half a point. And those have got many zeros in them… I have never produced this many ads in a short amount of time.”
The pace is hammering on more than the creative or campaigns. There’s a formula in food retail, Ballesty says, that extends to constant product testing, observation and insights. Pull back from an accelerator pressed hard to the floor, and the cupboard of innovation quickly begins to look empty. You end up “shooting in the dark”. That’s where Domino’s was when he joined, he says.
There are 863 Domino’s stores in Australia and New Zealand, which sold more than 107 million pizzas in 2021 – $2.9 billion in online sales, according to the company’s annual report. But the company’s share price has plummeted in recent months after a Covid high of $160. It’s now at about $70, roughly where it was pre-pandemic.
In the past week Domino’s scale and impact was hammered home to Ballesty in an email from a store owner.
“You can just see these wheels turn to the point that I had a franchisee reach out to me during the week in an email and he said, 'we used to get the TV schedules. Can you start resending them? Because on certain nights when you're heavy on TV and I'm understaffed, I feel the pinch',” Ballesty says.
“That is just an incredibly reactive machine that is wonderfully hectic to be part of.”
(Our major competitors) have moved way beyond price and promotion. They've gone way beyond just talking about their product. I think they're having a real lot of fun with the consumer in culture and I love it.
Food aggregators, owning delivery, data
More than half of Domino’s business comes through its app but food aggregators like Uber Eats and Menulog have become a "significant" part of Domino’s business in three years. They now generate between $800m and $1.8 billion in total food market volumes and have blown up legacy customer expectations around delivery. One upside, Ballesty says, is that they are bringing in new customers, not poaching Domino's existing base.
“Families are saying, ‘let's get Uber Eats tonight’. It's a restaurant. The choice is endless. I go to research and I'm hearing stories of a family of five going to three different restaurants in the one night. So choice is paramount,” Ballesty says.
“We don't trust [delivering pizzas] with anyone else other than someone who's deeply trained in that … And if you want to know if something's got a significant impact on a business, I've got a department in my team that points and looks directly at the aggregators. That team didn't exist three years ago. It shifted our structure.”
Ballesty said he appreciated the shift towards superfast delivery when he was sick with Covid, back in January. He ordered some Kombucha, and it was at his door in 10 minutes. “It’s definitely a delivery generation. No-one has to leave their home, their restaurant is in their hand. It’s incredible,” he says.
The fact that Domino’s delivers its own products also gives it a lot more control over the quality of its service, as well as a layer of consumer data that other QSR restaurants may not have. Ballesty says both he and a part-time delivery driver get paid on the same schedule, meaning he views them as a colleague. Scale and owning the relationship – where possible –from the raw ingredients to a knock on the door improves the service tenfold, he says.
The company has “some of the cleanest” first party data he has seen, but too often it gets overused.
“If you order from me today, why am I talking to you tomorrow?” he says. “We can probably be a bit smarter in how we’re deploying that data and what we’re doing with it. But it’s an incredibly powerful tool.”
He has stiff competition. KFC and McDonalds are working hard on new products, have powerful advertising machines, and are working well on sport and culture, Ballesty says.
“They're doing some incredible things, and their media integration and their real time integration is just fantastic. I admire it deeply. And I look at it fondly, and I'm figuring out where's my entry point?” he says.
“Some of the work that they're doing in culture around those sports (AFL and NRL) are outstanding and they are really existing in culture. They've moved way beyond price and promotion. They've gone way beyond just talking about their product. I think they're having a real lot of fun with the consumer in culture and I love it.”
We can have that influence because we're that big… I hope I’m sitting in a seat where I can influence that stuff when it happens.
Pizza with purpose, but not ‘six-minute purpose videos’
Ballesty has a one-word answer to whether brand matters (“yes”), and says he was upfront about this in his job interview. “I’m not here to be the price and slice promo guy,” he says.
“I think we do need sales momentum, as does everyone, but I will always say, until the end of my career, that brand is the thing that sets you free and that allows you to thrive. And I think that that's the journey that we're on.
“But we don't have to make six-minute purpose videos around our driver. We just need to say stuff that matters and that counts with consistency. And things like brand assets and memory structures are key. You have to revere the things that are important and let the things go that are not and try and be a bit patient. Patience and brand building come hand in hand. The only thing is that a retail business is not patient.”
In his time at Diageo, working with its vodka and gin brands, Ballesty says there were brand purpose journey sessions, agreements between CMOs, and brand stories that were worked and re-worked.
“I will never live in that luxury in this business,” he says. He said it’s unlikely he’ll be joining brand purpose workshops, but will rather ensure the brand has consistency, relevance, and is practicing what it’s preaching.
It has a charity, for example, called Give for Good, and raises money for charity partners. During the floods, Ballesty says unless a store was underwater, it was delivering pizza or handing it out to people with flooded homes.
He also recently completed a University of Cambridge course in business sustainability management, to fully understand scope one, two and three emissions and what marketers can do to create meaningful change.
“I went from being interested to elbowing people out of the way to get this job because we are such a high-volume business,” Ballesty says. “We make a small percentage change, and that's going to have a significant impact in the world that we live in.”
Domino’s’ corporate Environmental, Social and Governance (ESG) plans are incoming “real fast”, and it will include things like actively compostable pizza boxes and looking at its supply chain. It will ramp up to 2030, he says, because there are some “very serious goals” that have been connected to people’s remuneration. That strategy has worked elsewhere, in places like the UK’s ITV that linked outcomes to executive pay.
Agencies and media owners will be in the spotlight once Domino’s gets its own assets under control. “I think we'll get to a point where we will want a percentage of our outdoor to be solar powered,” Ballesty says.
“Once we get our own house in order and what we can start working on and focusing on and having an impact, I think, of course, the circle comes out and you start looking at other areas to make an impact, and we can have that influence because we're that big… I hope I’m sitting in a seat where I can influence that stuff when it happens.”
“I spoke to a lot of CMOs before I started – (Coles CMO) Lisa Ronson, (IAG CMO) Mr (Brent) Smart, and talked about the changes they made and the people they had in their team and how they sort of set up their teams and partners. And I realised very quickly that there was probably a need for a different creative solution.
New agency, creative key
In January, Domino’s was announced to be the foundation client for It’s Friday, a new creative, media, CX and PR agency formed by Pete Bosilkovski, Vince Lagana and Jeremy De Villiers.
Ballesty says he didn’t want to be the CMO who came in and changed the agency structures, but his mandate to find growth meant changes needed to be made.
“A lot of growth comes in creativity, and where we're going with media channels and coming out of TV and into activation and taking those ideas that resonate in culture, I knew before I started that I probably needed some help,” he says.
“I spoke to a lot of CMOs before I started – (Coles CMO) Lisa Ronson, (IAG CMO) Mr (Brent) Smart, and talked about the changes they made and the people they had in their team and how they sort of set up their teams and partners. And I realised very quickly that there was probably a need for a different creative solution.”
He wasn’t about to walk into creative hotshops like The Monkeys or the Saatchis, “although I would have loved to”, but it all came together with It’s Friday.
“Peter Bosilkovski is leading that charge. And he's got Vinny from an ECD point of view. And Jeremy de Villiers, who is a Swiss Army knife, and Cate (Mathers) from a planning point of view, and just an incredible bunch of people that I have been really lucky to work with in my life and to bring them together under one,” Ballesty says.
“We've produced a lot of stuff on the run, and we're having a tremendous time. It's where I get a lot of joy… They are working too hard and too fast, and that's not sustainable. And we've gone from briefing over telephones to writing a brief and having an objective and all of that stuff that's essential to make sure that we're all accountable and aligned to what happens next.”
It's Friday is now working closely with Domino’s media agency, GroupM’s Wavemaker, doing joint presentations and gathering insights together. It’s “more laughs than tears at this stage”.
‘If you had $100, where would you put it – acquisition or retention?’
Last week, Ballesty was in Los Vegas at the global conference for the Domino’s team. Staff shortages, price increases and supply challenges were the threads underpinning two main conversations with the world’s Domino’s marketers: Media mix modelling and return on media investment, and linear versus connected television.
“One of the questions that was posed, ‘if you had $100, where would you put it – in acquisition or retention?’ I think that's just a wonderful question,” Ballesty says.
“And the easy answer is – Byron Sharp when you're listening to this, you'll love this – acquisition. Getting the category buyers in. It's an impulse purchase, choice has never been easier. Frictionless purchasing, delivered to your door in minutes, all that sort of stuff.” He falls at about 70 per cent acquisition, but says the APAC regional marketer for Domino’s, Todd Riley, spoke a lot about lifetime value and creating great experiences over time. Most Domino’s customers are probably people who order out a lot, Ballesty says, and it’s a life stage or lifestyle choice.
Over the next 12 months, Ballesty is looking to give his team some space to breathe. Being better planned will – he hopes – mean they can sit back, re-assess, and come up with great ideas. Non-stop running is a tough place to be, and it’s been like that so far
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