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Domino's spent $50.4M on TV ads to brag about $100k donation
- ridiculous_leke 4y agoDoes anyone think rising inflation will tame such splurges?
- 4oo4 4y agoNo, it will probably make it worse since it gives them cover to waste money like this then raise prices under the pretense of inflation.
- gruez 4y agoThis ignores macroeconomics 101. If money is less plentiful/cheap (as of rising interest rates brought on by inflation), then there's less incentive to waste money on investments with questionable return prospects. This includes "investments" in PR. The point about being able to "raise prices under the pretense of inflation" is a red herring. You know what's better than raising prices and then blowing the surplus on ads? Raising prices and pocketing it. You only spend it on frivolous projects if there's nothing better to do with it (eg. because the fed flooded the economy with dollars).
- 4oo4 4y agoActually macroeconomics 101 fails to fully describe the situation we're in. Market concentration (whether it's a single company having a monopoly or oligopoly, a holding company owning different "competing" firms within the same industry, or incestuous relationships created by someone being a board member for multiple companies) throw the usual you're talking about incentives out the window. The near zero interest rates we had until recently weren't so much a balancing act as much as a charity program. And speaking of the Fed, they in effect cause the "free" market to be more like a planned economy, one where those with capital can maintain access to almost limitless free money, and where they use soft power to suppress wages. Yes, there are other pizza chains, but Domino's has almost twice the market share of its closest competitors, meaning it can waste money in an irrational way with few consequences, contrary to the rational actor and healthy competition that most models assume: https://medium.com/edison-discovers/dominos-takes-50-of-pizza-delivery-market-leading-pizza-hut-29-and-papa-johns-21-6f8c11ef03a3 https://medium.com/edison-discovers/dominos-takes-50-of-pizz... This is a good deep dive into these sorts of dynamics: https://www.amazon.com/Peoples-Republic-Walmart-Corporations-Foundation/dp/178663516X https://www.amazon.com/Peoples-Republic-Walmart-Corporations... For years, lots of companies gorged themselves by burning money by doing stock buybacks just for the sake of pumping share prices for fleeting short term gains for executives and shareholders, while everything that makes the company actually operate is slowly hollowed out. Many of these same companies will then ask for bailouts after wasting all this money and making bad business decisions, like airlines. This example with Domino's is actually pretty mild in comparison to money wasted with things like stock buybacks and executive bonuses. Macroeconomic models also don't take bailouts into account, which are usually needed because companies make bad, irrational decisions that favor extreme short term thinking. > "Raising prices and pocketing it" Precisely, that's what many of these companies are doing. Whine about inflation and raise prices for consumers while simultaneously bragging about record earnings on shareholder calls, the only place in practice where they are obligated to tell the truth. If inflation was really the primary cause of price increases, you'd likely see them slashing earnings projections in line with that, but that's not happening. It's certainly a contributor, but to know if a company is telling the truth you have to look at their earnings when they're saying that.
- doitLP 4y agoWaste? Any press is good press and a lot of people are talking about this. Besides, the company already allocated budget for this last year as part of their broader video budget. This commercial run just happens to be about the donation. These things are usually done by some Chief of Bullshit and Diversity Officer and the ad agency chose to highlight it to tick the “social responsibility” slot in this year’s slate of commercials. Would you rather they spent the money on more ads of dripping cheese? Would it be ok to spend $50mm promoting it if the donation was also $50mm? What a nothingpizza.
- jen20 4y ago> Any press is good press Tell that to Peloton.
- powerhour 4y agoProbably not, as long as Pizza Hut is willing to spend comparable (inflated) cash. You might see a short-term dip, though.
- winternett 4y agoThe only thing that will change bad business practices is consumers not supporting bad business. It's obvious that regulators are willfully asleep at the wheel.
- atdrummond 4y agoIt wasn’t even corporate who made the donation - it was local franchisees.
- winternett 4y agoDomino's also charges a convenience fee on top of your tip for pizza delivery when ordering online. It changes based on your order's volume. So many business related things simply don't make sense any more.
- dymk 4y agoAre people willing to pay it? If yes, makes sense from their angle.
- toyg 4y agoBusiness will charge what the market will bear. What they call each price element, is fundamentally irrelevant.
- mdavis6890 4y agoAlso the online ordering infrastructure that has to be developed and maintained is run (and paid for) by corporate - not the franchisees (I assume). This makes the online ordering system essentially it's own business that must provide it's own value to get paid. The price of the pizza goes to the restaurants, the delivery fee goes to the driver (mostly, I hope), and the "online convenience fee" goes to the business running the online ordering system. It all works out.
- corrral 4y ago> the delivery fee goes to the driver (mostly, I hope) I don't think I've ever [edit: should read "recently", I surely saw some early ones that didn't] seen one that doesn't specify that the driver doesn't get the money. Presumably because when they (most pizza delivery places do this now, plus I think Jimmy Johns does it, probably others too) first started adding those fees some years back, people assumed it was for the driver and stopped tipping, since it's usually about as much as a decent tip would be. Ever-rising, often-sneaky (different prices for delivery, much worse coupons for delivery vs. pick-up) increases in delivery costs have me thinking like my parents used to, and rarely ordering delivery anymore. There was a golden age in the late 90s and early '00s when delivery was pretty damn cheap, basically just $3-5 for a tip. It's over.
- chrismorgan 4y agoThere’s something like that in Heinlein’s The Man Who Sold the Moon, after the explosion of a space station and ship; in a company meeting: —⁂— “Very well. Now the public relations report—let me call attention to the first item, gentlemen. The vice-president in charge recommends a schedule of annuities, benefits, scholarships and so forth for dependents of the staff of the power satellite and of the pilot of the Charon: see appendix ‘C’.” A director across from Harriman—Phineas Morgan, chairman of the food trust, Cuisine, Incorporated—protested, “What is this, Ed? Too bad they were killed of course, but we paid them skyhigh wages and carried their insurance to boot. Why the charity?” Harriman grunted. “Pay it—I so move. It’s peanuts. ‘Do not bind the mouths of the kine who tread the grain.’” “I wouldn’t call better than nine hundred thousand ‘peanuts,’” protested Morgan. “Just a minute, gentlemen—” It was the vice-president in charge of public relations, himself a director. “If you’ll look at the breakdown, Mr. Morgan, you will see that eighty-five percent of the appropriation will be used to publicize the gifts.” Morgan squinted at the figures. “Oh—why didn’t you say so? Well, I suppose the gifts can be considered unavoidable overhead, but it’s a bad precedent.” “Without them we have nothing to publicize.” “Yes, but—” —⁂— (Harriman then insists on not settling with a woman who gave birth as the satellite blew up and is suing for half a million due to birth defects, saying that in the long run any compromise or settlement would be dearer than fighting it, even with possible bad publicity; and they should buy the judge if necessary.) I greatly enjoy this story for its keen assessment of the social and business factors to such progress, through its main character Harriman. Indeed, the best science fiction does tend to contain rather a lot of social study.
- csours 4y agoDang. I need to re-read some Heinlein. I read most of his books when I was a teenager.
- dont__panic 4y agoI loved The Moon is a Harsh Mistress, thanks for adding another book to my "to-read" queue!
- graton 4y agoI thought about this almost every I time I saw the ad. Doing a quick search there are about 6,185 Dominos restaurants in the US. Which works out to about $16 per restaurant. I always felt it was just a marketing stunt and disingenuous of them.
- PeterHolzwarth 4y agoDid Domino's spend an extra 50 million to brag about a 100k donation, or did Domino's have a fairly normal ad-spend year, of which 50 million focused on the donation?
- koheripbal 4y agoThis is a standard anti-corp hit post. It's better to just skip it and move on.
- toolz 4y agoWhile I'm generally inclined to agree with downvotes because you don't really explain your reasoning - this is a post on an openly biased subreddit (anti-work) and it doesn't source any of the information given. It's quite openly an anti-corp hit post and it's not trying to inform readers. If it were then I wouldn't have to go research if what the poster is saying isn't completely fabricated.
- skciva 4y agoEverything has bias, it's the human condition. The post does just fine informing readers and if you read the comments theres plenty more information on how Dominos exploits its workers and is just generally not for the people. DO your research, sure. Fact checking is important. But if it looks like a duck, swims like a duck, and quacks like a duck..
- toolz 4y agoSure, but "news" should inform people, not be a random screencap and a title that gives you zero indication that the facts are real. I don't think hacker news would do very well if it just posted screencaps and made bold claims leaving it to the readers to dig up any relevant information.
- ushakov 4y agothey’ve done it themselves spending $50m on ads while bragging how much they help local businesses it’s just on another level
- mdavis6890 4y agoI think a more genuine headline would be "Domino's spent $50.4 million (and counting) on TV ads [that] brag about [their franchisees] giving local businesses a total of $100,000" Clearly they're going to spend money on advertising anyway. And it's not unreasonable for those advertisements to include things they are proud of, such as when their franchisees support local businesses. They clearly say "Domino's franchisees" in the ad.
- sdenton4 4y agoOn the other hand, giving local businesses $50M could easily constitute it's own kind of widespread advertising...
- tylersmith 4y agoSo could burning $50M, but that's not the advertising they chose.
- mypastself 4y agoMoreover, I don’t know what kind of app is used in the screenshot, and the information may very well be correct, but the Reddit post is unsourced. So someone in the comments posted a link to a Metro article as source, which links to a screenshot posted on Twitter. Might as well post this HN thread on Twitter to complete the ouroboros, perhaps a news site will pick it up next…
- mdavis6890 4y agoObligatory: https://m.xkcd.com/978/ https://m.xkcd.com/978/
- hedora 4y agoI thought the alt-text for that used to cite a book about pizza marketing budget breakdowns. This is why I don't trust XKCD as a primary source: No edit history or permalinks.
- tzs 4y agoNo, they spent several times $50.4M on TV ads to promote their brand to try to increase food sales. $50.4M of that happened to be on ads that featured a $100k donation. That part of the cost of their $50+M ad campaign was a $100k donation is no more interesting or relevant than how much they spent on animation to make their Noid ads or how much they spent to pay actors in their ads.
- enumjorge 4y agoThe point still stands that spending $50M of your ad budget to highlight a $100k donation is a bit ridiculous.
- eloff 4y agoNot really, because they would have spent the ad budget anyway, just without calling attention to the donation.
- arcticfox 4y agoI'm surprised people aren't getting this. The $100k is from their advertising budget (or could be). They chose the proportion 500:1. It's comical. If you want to be seen as a good actor, don't take your dollar and then split a penny in 5 pieces and give one to charity. They could have made 10x more of a donation and hardly touched the budget they had for their ads. Or 100x more and only slightly reduced the ads. All while increasing the advertising power of the donation they were showcasing in the ads themselves, so it's not like they'd simply be losing the money to charity.
- dwild 4y ago> They could have made 10x more of a donation and hardly touched the budget they had for their ads. Or 100x more and only slightly reduced the ads. All while increasing the advertising power of the donation they were showcasing in the ads themselves, so it's not like they'd simply be losing the money to charity. That $50m is the amount decided to reach their audience. Increasing the donation won't increase the reach... I remember recently a pizza chain in my province decided to stop all their ad campaign for a month and give the amount they would have spend otherwise to people. Hey if it works for Mr. Beast, it could work for them right? I saw it on Tiktok so a good platform to allow organic sharing, well a week later I started to see ads about it on Facebook... they didn't reach their audience. So yeah that spending is for their ads, they are going to spend it, it's there for a reason. Believe me, if they could lower it in some way, they would... that's called business. Is there really anyone in the world happy to pay ads and that doesn't do anything to try to lower that cost? At best they could avoid the bad press from r/antiwork (does it really matters? how many views did that get versus that $50m ads?), but I got a feeling that they would still complains about the fact that they spend more in ads than in the actual donation.
- toolz 4y agoand the source for this is a link to an anti-work subreddit whose post content is a screencap and a title that doesn't source the $50MM ad budget? How is this making the front page? I'm not claiming any of this is incorrect, but I am saying based on the submission I have nothing but some random posters word (on a biased sub) as the source.
- ushakov 4y ago> How is this making the front page? a lot of HN’s are biased against advertising industry
- whywhywhywhy 4y agoYeah I mean no shock there. When you pull back the curtain most charities and donations are just complete BS.
- jovial_cavalier 4y agoI guess they could just not make a donation and instead spend $50.5M on ads... Would you be happier then?
- selykg 4y agoThis is sort of the opposite, maybe... of better to be thought a fool than to open one's mouth and remove all doubt. Better to donate money silently, than to open one's mouth and show how poorly you spend your money. Or something like that. I vowed, long ago, that if I ever ran a company successful enough to be able to donate large sums of money, that it would simply be done quietly, and only ever mentioned in ways that it made sense. I.e. if it were a board meeting, cool, mention it. The entrance to the building in the lobby? Cool, mention it. But in my mind, donations are not meant to be bragged about, it's a civil service, not marketing.
- areoform 4y agoThe screenshot seems to be iSpot.tv, https://www.ispot.tv/ https://www.ispot.tv/ which seems to be somewhat accurate. You can sign up for a trial and look up the ad.
- gruez 4y agoNot really. Surely a megacorp like dominos would get better rates (because of negotiating power/buying in bulk) than buying at spot prices on some self service website?
- engneering101 4y agowow! what a shame!
- shalmanese 4y agoIt's like saying Subway spent a billion dollars to promote how one guy bought $10K worth of sandwiches over 10 years. Like, yeah, that's a technically accurate description of the Jared from Subway campaign but the actual example is meant to stand in for a larger message. Same with Dominoes, they obviously spent more than $100K in charity over the entire year, they are using 1 $100K campaign as a standin for all the other charitable stuff they did because it's a much more compelling ad than just a spreadsheet scrolling for 30 seconds.
- coding123 4y agoIt's not like ALL of you judging things right now don't even donate .2% of your shit away either. (Yes I know some of you donate really well but the vast majority of judgers right now - don't)
- pulketo 4y agoCorruption inside, no other explanation