Mobilizing Marketing and Advertising Dollars

Buffalo Wild Wings

Walk into almost any restaurant these days—even fine-dining establishments—and you’re likely to see at least a few guests gazing at their mobile phones or tablets. Operators see this, too, and realize that digital advertising is the way to connect with customers.

The numbers bear that out: During 2013’s third quarter, the restaurant industry’s ad spending fell 3.6 percent compared with the same period a year earlier, according to Kantar Media, a media marketing and research firm. During the same period, the industry’s mobile ad spending grew a hefty 234 percent, notes mobile marketing firm Millennial Media.

“We’re seeing more and more industries increase spending on digital” advertising and marketing, says Mark Fratrik, senior vice president and chief economist at BIA/Kelsey, a financial and strategic consulting firm for the broadcasting and media industries.

However, television and radio remain important ad platforms, he says. BIA/Kelsey estimates that in 2013, 15.8 percent of full-service restaurants’ local advertising dollars went for TV, while radio accounted for 16.3 percent. Online was 9.4 percent of spending, with mobile at 2.1 percent.

But the Chantilly, Virginia–based company forecasts online advertising will grow to 11.9 percent by 2017, while mobile is expected to jump to 6.9 percent. TV and radio will dip to 13.9 percent and 15.3 percent, respectively.

One restaurant company putting more marketing dollars into digital media is Darden Restaurants, the Orlando, Florida–based parent of Red Lobster, Olive Garden, LongHorn Steakhouse, and others.

Darden’s digital moves should “enable us to have much more one-on-one conversations with guests,” chief executive Clarence Otis told analysts in December. “As those scale up, we would expect our television marketing expenses to scale down dramatically.”

Although Darden declined further comment, the company’s Red Lobster chain, which is slated to be sold or spun off, has worked to increase its online visibility with the assistance of companies like Levelwing, a New York-based digital marketing company.


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