IHOP, now IHOb, bets on a big ‘spray and pray’ marketing stunt
As social media lit up Monday with talk of IHOP’s temporary name change to IHOb, industry observers questioned whether an inverted P, with a corresponding refocus on burgers, would lead to a surge in sales for the aging brand.
The chain known for classic A-frame pancake houses with blue roofs is the latest to embrace a marketing tactic rocking the restaurant industry. The game plan: Find a creative gimmick, push it hard with teaser ads, hope for a viral social media campaign, then stand back and wait for hungry customers to show up.
In the industry, the strategy is called “‘spray and pray,” said Erich Joachimsthaler, CEO of the brand consulting firm Vivaldi. “You spray it (the message) massively, and you pray that the person gets into the store.”
The world of chain restaurants grows ever more treacherous. There is increased competition from old and new players, as well as upstarts, such as food trucks and supermarkets featuring in-store dining (called grocer-
ants.) The industry increasingly turns to marketing stunts to draw in customers — the business of repeat ones and cash from new diners.
The IHOP switch that had pancake lovers panicking — IHOP is still known to many by the name it once had, the International House of Pancakes — was brash enough to grab media and online attention. Other recent examples of short-term stabs at fickle diners include the Spielburger by Carl’s Jr./Hardee’s, a play on film director Steven Spielberg’s name as his movie Ready Player One premiered in March; Starbucks’ numerous limitedtime offer drinks, including last spring’s social media sensation the Unicorn Frappuccino; KFC’s merrygo-round of Col. Sanders portrayers; and Wendy’s snarky tweets.
“We’re at the tipping point of where social and digital will become the bigger driver of awareness, sales and traffic for most advertisers,” said Brad Haley, chief marketing officer for IHOP, er, IHOb.
It seems to be working. From June 3 through Monday, when the name switch was touted, IHOP’s online mentions totaled more than 362,000, compared with 21,000 during the same period in May, the social media monitoring firm Brandwatch calculated.
The question remains whether buzz translates into more foot traffic and higher customer tabs for the brand, whose parent company, Dine Brands Global, has its challenges. Besides IHOP, the company owns Applebee’s. Both table-service restaurant chains have been undercut by quick-service, order-at-the-counter operations that offer lower prices.
As a result, Dine Brands Global saw revenue drop from $681 million in 2015 to $605 million in 2017, according to Bloomberg data.
A stunt “increases the chances someone will patronize your business. It can be great for a mature brand that hasn’t had much hype lately,” said Marlene Towns, a teaching professor of marketing at Georgetown University. “It’s become our new normal, especially with this new younger demographic.”
The industry hopes that the tactic works because restaurants have struggled with declining sales for years. The need to grab and hold customers’ attention and try to move into new markets is key in a crowded environment.
McDonald’s saw its revenue sink from $25.4 billion in 2015 to $22.8 billion in 2017, according to Bloomberg. Yum Brands — which includes the Taco Bell, KFC and Pizza Hut franchises — also saw a big drop, from $13.1 billion in 2015 to $5.9 billion in 2017.
Another revenue drop is predicted for both this year.