A Loyalty Program That Doesn’t Require Loyalty, A Drop in Advertising Rates on Google

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Good Wednesday Morning,

DAYLIGHT  

Domino’s has introduced a loyalty program that rewards you for eating pizzaeven if it’s not Domino’s pizza, even if you make it at home: “You get 10 points for each pizza pic you upload. Hit 60 points, and you get a free, single medium two-topping pizza.” The company announced the promotion instead of running a Super Bowl ad and is counting on word of mouth: “’We decided to invest in a breakthrough program that rewards everyone who loves pizza as much as we do,’ Art D’Elia, Domino’s chief brand officer, said. ‘We know everyone is asking themselves, Did Domino’s just say they will award points for eating any pizza? Even from a competitor?’”

MARKETING

Suddenly, the cost of advertising on Google is actually falling: “The per-click cost on Google’s advertising—an imprecise but generally useful yardstick for how much Google is able to charge advertisers—was down 29 percent compared to last year, and 9 percent from last quarter. Google, for some reason, is having trouble getting advertisers to pay as much. And this isn’t an industry-wide problem; both Amazon and Facebook have continued to successfully increase the amount they charge advertisers.

“Google’s main source of competition is not Facebook but Amazon. Amazon reported 97 percent growth in advertising revenue this quarter. Advertising directors speaking to CNBC have said some brands were moving 50 to 60 percent of their ad spending from Google to Amazon.”

STARTUP

Nicole Snow, founder of Darn Good Yarn, thought getting pregnant was the worst thing that could happen to her as a business owner. Her daughter was born at the end of September, heading into the holiday season, which is a nightmare scenario for business retail. But her team rose to the occasion and powered through her absence, which led Snow to look at leadership differently:

“We actually use the maternity concept now to start developing every employee’s leadership skills. This just happened with Phil, my customer service manager. I was trying to get him to start exercising his leadership muscles, so I looked at him and said, ‘I need you to pretend like you’re pregnant.’

So we went through the process of what happens. For example, what would your job look like if you could only work five hours a day? What would have to come off your plate? What are you wasting time on? What are your strengths that you should be working on during that time, and what can we potentially put onto someone else’s plate or hire someone to handle?”

RETAIL

Flamingo, a woman’s body care startup, is the latest direct-to-consumer brand to be sold at Target. The startup was launched in 2018 by Harry’s, whose men’s shaving gear already has space on Target’s shelves. “For Target, selling goods from brands like Flamingo is helping the company increasingly become known as a ‘cool’ place to shop. And for brands like Flamingo—which uses sleek packaging to promote women shouldn’t be embarrassed to shave their underarms—the deal offers huge exposure and reach to consumers en masse that would be hard to achieve alone.”

“Tie-ups between traditional retailers and these up-and-comers make sense for a number of reasons, including the fact that the collaboration can help young brands decide if they should open their own standalone stores as a next step, according to Jake Mendel, of Silicon Valley Bank’s Early Stage Practice in New York. Many of these brands born on the internet bring with them cult-like followings—huge Instagram audiences—that legacy retailers like Target and Walmart can potentially piggyback on, Mendel added.”

CLIFF’S TAKE ON M&A

A few weeks ago, MNG Enterprises, also known as Digital First, gave an unsolicited offer to newspaper publisher Gannett, asserting in the offer that Gannett doesn’t know how to run a viable business. Gannett came back with a firm rejection and Digital First on Monday clapped back saying Gannett has destroyed 40 percent of its value. With this back-and-forth, we asked Cliff Oxford to make sense of this.

“Here’s the deal, if you want to have a merger, this isn’t how you normally do this. When you have a merger, you usually see a match in the two companies’ cultures. My guess is that the people at Digital First weren’t able to get in touch with the managers at Gannett. So they probably said, Let’s just go public with this and force the issue. Remember, Gannett is owned by institutional investors, so the strategy was to get their attention and get their managers on the phone by publicly starting the conversation. Still, very unusual and you can chalk up the reaction to Gannett’s ‘no’ as pure hissy fit.”

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REAL ESTATE

One of the smallest houses in San Francisco is a near century-old, 480-square foot fixer-upper that sold for $600,000 after two months on the market. That is smaller than Millennial Matt’s first apartment in Stamford, CT with a rent of $1,100: “The influx of tech recruits has only exacerbated the city’s housing crisis. The median real-estate value in the neighborhood is $802,200, much more than the pink dwelling’s asking price. For comparison, the median real-estate value in San Francisco overall is nearly $1.4 million.”

HUMAN RESOURCES

In light of the Ralph Northam scandal, the Wall Street Journal says that business owners and executives should conduct “opposition analysis” of themselves to see what’s in their yearbooks and their pasts: “As a best practice, companies should be doing background checks on all senior level and board hires, digging in 25 years or more. ‘You have to go back both virtually and physically,’ he said, identifying ‘high school and college activities, fraternities, nicknames, everything.’ But that doesn’t mean that getting it all out there will solve all of your problems. “Instead, the best option is to think through whether there’s a way to explain the incident if it does come out, as well as whom to turn to—such as an old friend or classmate—who could provide helpful context.”

Women workers in Silicon Valley are more likely to come from outside the US: “Silicon Valley, the global center for high-tech innovation, could be renamed ‘Immigrant Valley.’ When it comes to technical talent, the engine of Silicon Valley is fueled by foreign-born workers, many of whom are from humble roots. And having worked hard to get here, many have ambitions beyond their day jobs.”

OBITUARY

Albert Dunlap, a tough-talking turnaround specialist who was known as Chainsaw Al and whose career ended in an accounting scandal, died at 81: “Unlike other corporate executives who laid off even more employees, the preternaturally confident Mr. Dunlap unapologetically boasted that the brutal efficiency of his methods was critical to saving the jobs that were not axed. In 1996, for example, he stepped forward when dozens of other executives refused to speak to Newsweek for a cover article, titled ‘Corporate Killers,’ about downsizing.

“‘We’re painted as villains but we’re not,’ Mr. Dunlap said. ‘We’re more like doctors. We know it’s painful to operate, but it’s the only way to keep the patient from dying.’”

FEEDBACK

Super Bowl ad commentary:

Mark Goldman, founder of Salus: “The Super Bowl (while not always a great game) is meant to have adverts that entertain (think old Pepsi ads with Michael Jackson or even the new Alexa celebrity ads, or the Bud Frogs). Thought that HBO got that part right with a clever partnership (Bud Light) to promote its new season of Game of Thrones.”

Warren Erickson of Location Aware loved the Harrison Ford argue with a dog on a Super Bowl ad, “Amazon with the dog ordering food. Creative, light, funny and demonstrated what Amazon is all about.” Warren, is it at all strange that the dog Indiana Jones was arguing with was a Boston terrier? As in New England Patriots?

SPOTLIGHT

On Mind Your Business tomorrow, the topic will be Cannabusiness, specifically the entrepreneurial opportunities and challenges of legal marijuana. Got a question or a comment? Call in when the show airs Thursday at 1:00 p.m. ET on SiriusXM 132. The number to call is 844-942-7866.

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com.

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