Report Highlights

  • Marketing spend analysis on 50+ national chains, including: (1) changes to marketing allocations and creative ad agencies; (2) 2019 marketing spend detail; (3) net marketing spend by chain 2014 – 2019; and (4) social media stats by chain.

Conclusion

  • In the past, aggregate marketing spend would grow in-line with systemwide sales growth (a combination of comps & new unit development). However, the effectiveness of traditional TV ads is declining as fewer consumers watch live TV, opting instead for Netflix, social media, Internet video and gaming. The brands must face the reality of what demo is left watching traditional TV (beyond live sports).
  • However, change happens slowly, and it takes a great stretch of faith to migrate marketing spend away from traditional TV to nascent, unproven marketing channels.
  • In any case, the data from this report does reveal a slow, but steady migration away from expensive TV advertising towards DIY social media marketing. Resultantly, we see an increase in marketing admin spend with a corresponding decrease in the percentage of spend on national, and especially, local (reflecting less scale-based cost effectiveness of local TV vis-a-vi national TV).
  • It remains our opinion that the industry’s challenge to reach consumers with their messaging (given the ongoing, seismic shift in media consumption) represents a leading contributor to current traffic challenges.

 

IDR Marketing Spend 2020 – Report Outline