The Quick Service Restaurant (QSR) category, including well-known national brands and lesser-known regional and local favorites, will come close to spending $4 billion in local advertising this year.
But, is that spending thanks to local digital growth, rather than radio or TV? Perhaps, a newly released BIA Advisory Services report notes.
According to the just released “Insights into Local Advertising – QSRs,” all digital advertising is forecast to rise from 36% in 2019 to 44% by 2023.
But, the entire QSR category will dip slightly over the next few years before exceeding its 2019 level.
Where’s the lion’s share of spending set to go?
The answer is not Local Digital.
It’s also not Radio or TV.
The bulk of QSR spending, interestingly, is poised to go to Direct Mail.
But, BIA notes, all forms of digital advertising are not expected to slow down the surge in ad dollar magnitity.
Although the lion’s-share of the spending will go to direct mail, at nearly 30%, the industry has also been faster to adopt mobile advertising than most, and will spend slightly over $500 million, or 12.8%.
The “Insights into Local Advertising” report also notes that the per capita ad spending in the QSR vertical varies significantly from market to market, even in the 10 largest markets.
“Local advertising plays a critical role in the QSR category, even for national brands,” said Rick Ducey, BIA’s managing director and the report’s author. “As one marketing director noted to us, ‘If you don’t have a relationship with your community, you won’t have a business for long; (local advertising) is an investment, not a cost.’”
To examine the media consumption of QSR customers, the report offers a local case study from MRI-Simmons.
Looking at SimmonsLOCAL data for Adults 18+ in the Washington, D.C. market, a case study showing how different demos view and react to Chipotle advertising identified the most heavily used media (i.e., top two volume users groups) profile where ads are consumed.
The research found that the internet and TV were the leading forms of media used, with each at 40%.
Radio was a close No. 3, at 38%. This was followed by magazines (35%) and newspapers (29%).
“In this report, combining BIA’s forecast and takeaways from a leading U.S. market, we recommend five major factors for local media sellers to consider when working with local QSR outlets,” Ducey said. “Our strategic advice is based on where the technology is going and the trends we’ve observed.”
The National Capital Region is local to BIA, which is based in Northern Virginia.
BIA’s QSR vertical ad report profiles QSR ad spending by media for 2018 and 2023 to reveal growth and declines. It examines the per capital QSR ad spend across top 10 TV DMAs.
The report also offers five local strategies that local media sellers could adopt to become better marketing partners with their current and prospective QSR clients.
The data featured in the report is drawn from BIA ADVantage that includes BIA’s 2019 U.S. Ad Forecast for all TV and radio markets across 94 verticals, including QSRs. It also includes data from the Fall 2017 SimmonsLOCAL study, for consumer usage of ads in the Washington, DC, courtesy of MRI-Simmons.
