Denny's Super Bowl Ad Value: 'Incredible'

Denny's sign After its Super Bowl ad promoting a free breakfast created demand on Main Street, Denny's top executive Nelson Marchioli tried Wednesday to serve up interest on Wall Street. The CEO told investors that Denny's has had "a very encouraging lift in guest traffic" since the gimmick, but stopped short of predicting long-term results.

The benefit Denny's will receive from its $5 million investment in the stunt--advertising, free meals, etc.--will be determined by whether returning customers post-Feb. 3 become routine visitors. And Marchioli said "we still have a ways to go to cover the costs of the Super Bowl program" and "remain cautious in our outlook," partly because of the economy.

Denny's ran a 30-second spot in the game promoting a free breakfast two days later. Two million people showed up for a signature Grand Slam dish (usually $5.99) gratis. (The Slam includes a pair each of pancakes, eggs, sausage links and bacon strips.)



At times on Wednesday's conference call with investors, Marchioli may have crossed into hyperbole--calling aspects of the promotion "incredible" and "a game changer," and saying it generated publicity worth some $50 million. Responding to one investor's question, he said "there's no doubt in my mind that we're going to take back share" from competitors as a result.

The Denny's stunt did receive high praise last week on a panel at an advertising industry event, with executives touting it as a prime use of a Super Bowl ad.

While Marchioli spoke glowingly about the promotion, the conference call's main purpose was to discuss the chain's fourth-quarter and full-year 2008 performance. The results showed that Denny's needs, if not a grand slam, then some sort of home run--as revenues were down 19% for the quarter.

The Super Bowl stunt, Marchioli said, was aimed at "light and lapsed" Denny's customers. And he said an exit poll of customers on "Super Tuesday" showed that some 60% fell into that category.

Before the free-meal offer was mentioned, the company's first Super Bowl spot featured a waitress spraying whipped cream on a pancake stack as "thugs" discussed business. It was created by agency Goodby, Silverstein & Partners, recently hired by Denny's--partly, Marchioli said, because the shop is based in California, where the chain has roots and 26% of its restaurants.

The significant ad spending on the Super Bowl event does not augur Denny's increasing its budget this year; the money came as a result of a reallocation, Marchioli said.

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