Image: New Domino's pizza
AP
Domino’s ad lauds their reformulated pizza, but it’s the brutally honest tone that's causing buzz.
updated 1/11/2010 5:53:40 PM ET 2010-01-11T22:53:40

For a pizza joint, it's a bold move to tell customers your crust tasted like cardboard and your sauce was like ketchup.

But that's just what Domino's Pizza Inc. has been saying since last month in untraditional ads about the recipes it abandoned when it launched its reformulated pizza.

As industry observers — and even a late night TV host — scratch their heads, the company's incoming CEO said the chain had no choice but to be honest about its old recipe pizza if it had any hope of winning back customers.

"The old days of trying to spin things simply doesn't work anymore," President Patrick Doyle, who will become CEO in March, told The Associated Press in an interview. "Great brands going forward are going to have a level of honesty and transparency that hasn't been seen before."

Using a documentary style, the TV ads offer glimpses of focus groups and Twitter messages where customers said Domino's pies were even worse than microwave pizza and "totally void of flavor."

The ads then cut to interviews in the Ann Arbor, Mich., company's test kitchen, where chefs and executives tout the new pies' bolder, richer sauce, a more robust cheese combination and herb- and garlic-flavored crust.

But it's the brutally honest tone that's causing many to take notice.

"It takes alpha meat balls to stand up and say 'America, we suck,'" comedian Stephen Colbert said while lampooning the campaign on his show last week.

For the record, after taking a bite he declared: "Is that a pizza or did an angel just give birth in my mouth."

At the same time, customers who preferred the 'old' Domino's are now left in the cold, experts said.

"By doing that they are basically saying, 'We've been shoveling you crap for years and now we want you to trust us,'" said Kelly O'Keefe, managing director of the Brand Center at Virginia Commonwealth University.

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Executives said the chain decided to start overhauling its recipe about 18 months ago after mounting criticism from focus groups and on social media sites. But the idea for the bare-it-all campaign came from Crispin Porter & Bogusky, a major Madison Avenue advertising agency.

In the nation's $36 billion pizza market, Domino's ranks No. 2 behind Yum Brands Inc.'s Pizza Hut chain in sales and number of stores, according to market research firm Euromonitor International. Often considered a leader for customer loyalty, Domino's has scored painfully low on its pizza's taste.

Doyle acknowledges some leaders were wary of airing what could be considered the 50-year-old company's dirty laundry.

"The way we've positioned this with the consumer, we only get one shot," he said. "But the risk would have been higher if we weren't extremely confident that we have a better pizza."

While unusual, highlighting mistakes in an ad campaign can win over consumers — but only if the majority agree the product was faulty in the first place, said Kevin Lane Keller, a marketing professor at the Tuck School of Business at Dartmouth.

It can be more effective than simply highlighting the new recipe, he said, because Domino's is telling consumers it understands their concerns.

"Taking chances makes sense if you're in a position where you can benefit from it," he said. "And they may be if they have some negatives hurting them."

But Deborah Mitchell, executive fellow at the Center for Brand and Product Management at Wisconsin School of Business, said the campaign may cause confusion in the market place because people have known Domino's for having a quick, 30-minute delivery, not for flavor.

"They were about speed and reliability, and it was hot and it was good enough," she said. "So now to talk about taste is strange, and it's kind of calling out something that they've never been strong on."

Over the years, Domino's profit has seesawed, reaching $108.3 million in 2006 and falling to $54 million in 2008, the last full year for which data is available.

Through the first three quarters of 2009, overall revenue was off nearly 6 percent compared with the first nine months of 2008 but sales in established locations showed signs of recovery. Advertising spending for the same period rose 50 percent to $129.6 million, according to TNS Media Intelligence.

In 2008, Domino's sales in stores open at least a year — an important retail performance measure — sagged nearly 5 percent in the U.S.

Domino's has been carefully studying consumers' response to the new ads and new recipe but won't release sales figures. But it's streaming tweets about the new products at www.pizzaturnaround.com, where it also has posted an extended version of the ad.

"Most really like it, and some don't," Doyle said. "And that's OK."

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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