Casual vs Fast Casual – A comparison of media spending and social media

Casual Dining, Fast Casual. There has been much written about the battle for your stomach being waged between the two concept categories. Casual Dining, the aging champ, still hoping to hold on to its crown and Fast Casual, the plucky upstart finding new ways to surprise its foe and customers alike.

Fast Casual YOY sales growth is noted as almost double the rest of the restaurant industry. Traffic and sales for both categories can be easily compared. Digging a bit deeper, there is something else at play beyond those trend lines. In lieu of another inspection of those regularly reported numbers, we compared expenditures in media.

Using Kantar*, we pulled media spending for a two-year period by five brands casual dining and six fast casual brands. As you can see, over the course of two years casual dining spent almost 10 times as much as their competitors in fast casual. In television they spent over 10 times as much over that same timespan!

media spending casual dining fast casual

What’s telling is where the competition is closer: online. Fast casual brands spend just over half as much as the casual dining brands in the digital space. Not reported here is paid social and influencer marketing. For context, an analysis of four other brand categories outside of the restaurant space (beverage, CPG, finance, hospitality) we found that casual dining is actually the lowest reported spender in the digital space.

Looking at their media spend one might assume the growth was flip-flopped. But if media spend is a measure of outbound marketing, we wanted to juxtapose that against a measure of brand affinity and potentially loyalty – social media**. Looking at the same brands in casual an fast casual, we counted the social subscribers, comment volume and net sentiment of those comments over the same two year period as the media spends above.

social media metrics casual dining fast casual

Our hypothesis going into this research was that more media spend would lead to superior social media performance. But immediately, you can see spending 10 times as much on television only earns Casual Dining brands 17% more social media posts on average. Obviously, media is not being spent to attain social media comments, but at these rates, Casual Dining spent $329 per comment as a category; Fast Casual, $113. Staggering difference.

On top of that, the net sentiment of those posts is much higher for Fast Casual brands – and that’s including Chipotle’s terrible net sentiment of 47% – which brings down the average due to many posts about their recent woes.

Sentiment is important because it tells us whether people are posting positive or negative content about the topic, in this case – brands. Sentiment is measured here on a scale of -100 to +100, with zero being neutral. More people may be posting about Casual Dining brands, but those posting about Fast Casual brands are saying overwhelmingly positive things. Prior to Chipotle’s food safety lapses, we had recorded a net sentiment over 80 for the brands and used them as an example of positive sentiment.

Both post volume and sentiment might be a result of how these brands are using those online media dollars. Fast Casual definitely has tighter social integration in store and in online ad campaigns.

Where Casual Dining is leading obviously is in the number of Facebook subscribers (Likes). As a metric, they’re up 2-to-1 on Fast Casual. And isolating the online media spend of both category, Fast Casual has invested $3 for each Facebook page like, while Casual Dining spent only $2.54 as a category for each of theirs. This is actually indicative of the problem Casual Dining brands are having. Facebook has the oldest user base of all social platforms in the US, with the fastest growing user segment being those over 50. Facebook still has a large base of youthful users, but reaching them via the channel is nearly impossible without paying – organic reach is down around 6%.

As you can see, Casual Dining brands are clearly missing something. They’re spending much more than their Fast competition, but getting less in the way of sales and social recognition. In an upcoming post, we’ll provide deeper analysis into these comparative numbers.

Complete charts:
media spend social metrics casual dining fast casual
Want these numbers for your own? Get the raw sheet here.

*Kantar, though an industry standard tool for competitive media spend analysis, is only a guide. The numbers below are therefore best described as “reported spend.” Most mass media investments, such as national television are reliably included, while sponsorships and events will be predictably under-reported.

**All social data was pulled using Netbase. Without access to each account, we’re unable to track engagement on an account and post level or other deep funnel metrics. Posts reported are filtered to exclude content by each respective brand about itself.

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.