How Casual Dining Brands Are Missing with Media

casual dining, table, restaurant, digital media
Casual dining is investing without considering the full breadth of the customer journey

Which vertical would you guess spends the least amount of money toward digital media: CPG, beverages, finance, hospitality, or casual dining? If you answered casual dining, give yourself a pat on the back! I, on the other hand, was extremely surprised by this fact. In a recent research study by Santy, we looked across different verticals, picked a handful of brands in each category, analyzed their media spend, then measured how and if that spend had an impact on the individual brand’s social media sentiment or volume of mentions they received.

This bit about the casual dining category really jumped out at me. We analyzed Outback Steakhouse, Red Lobster, Chili’s, TGI Friday’s and Applebee’s. Of these brands, their digital media spend (display, search, and online video) made up an average of just 5% of their total media spend.

How could this be? Especially given the level of competition the casual dining industry is facing. Frequency continues to decrease, cost of employment keeps climbing, fast casual keeps gaining share, and expectations of diners continues to increase. What is clear is that these brands value TV (both network and cable) and believe it’s the answer to increasing traffic.

The Trouble With TV

The average TV spend during the last two years for each of the five brands we analyzed was just shy of $175 million compared to the average digital media spend per brand at $9.8 million. I understand the value of always being on TV. These brands are in an arms race for share of voice and dropping significant levels of TV is a huge risk but, here’s the problem: Millennials, who have a buying power of $200 billion in the U.S., are watching less and less TV.

Here are a few things to consider from Santy’s last study on Millennial video consumption to help paint the picture:

  • 27% of millennials don’t even own a TV
  • Only 58% of millennials have a cable subscription
  • 41% of millennials are always multitasking while watching TV

These stats alone are reason enough for casual dining brands to focus on their digital media plan. I’m not suggesting to slash your TV budgets for digital, but take a second (and third) look at your TV buys. Many of the casual dining brands we analyzed had network and cable media buys that mirror each other, meaning they are spending at high levels on both network and cable TV at the same time. I doubt the audience these brands are reaching on their network buy are vastly different from their cable buys. Therefore, their redundant investment in TV could be put to better use.

In addition, the second most frequently reported reason Millennials choose a restaurant is based on craving. These casual dining brands are missing a huge opportunity by not producing content online – unique from their :15 and :30 TV spots – in a tone that speaks to Millennials and hits that “food porn” level to create the craveability.

A Better Approach

A smart digital media plan can provide an additional value to a brand that traditional channels cannot offer. Utilizing services through a Data Management Provider (DMP) can provide your brand with a multitude of insights about your audience. By tying all the audience behavior, campaign activity, and third-party data together, brands can then optimize future media buys and the creative efficacy itself. As we know, all Millennials are not the same. A DMP can also allow your media team or agency to target digital media to audience segments against their unique online behaviors.

The way people are dining is changing, along with the way people are receiving messaging from brands. After analyzing media spend in the casual dining space over the last two years, it doesn’t look like this category is evolving. Which is strange given that the casual restaurant industry is projected to lose an estimated $1 billion in 2017 and remain fairly flat through 2020 (Mazzone & Associates; IBISWorld; Capital IQ). Not testing different media strategies would be the equivalent of insanity – defined as doing the same thing repeatedly and expecting different results.

Author: Alex Berger

I'm an analyst with over four years of experience in the dining and CPG space. I believe relevance is king and have the understanding of how to be relevant to specific audiences. Regardless of the source (web analytics, media performance, sales data, survey results, research studies) I discover and piece information together to create ideas that can live in multiple environments.