Sara Tucy, Senior Marketing Manager, Client Marketing, Valassis
Published Monday, Aug 27, 2018
Advertisers continue to struggle with the delicate balance of selecting the right mix of media channels, in an era where consumer advertising avoidance behavior is growing. Additionally, restaurant traffic continues to be one of the many challenges operators are battling in today’s environment. With traffic driving strategies at the forefront of restaurant marketing strategies, it begs the question as to why television spend has only decreased by 1 percent in the past five years within the restaurant segment.1 Ratings points continue to fall, the cost per point (CPP) continues to increase and cord-cutting accelerates – last year 11 percent of households canceled their pay-TV subscriptions which translates to 11 percent of lost impressions. Yet we don’t see any proportionate change happening in the vast majority of restaurant brands’ TV ad budgets.
Now before I further delve in to the disparity between television ad spend in contrast with advertising influence, let me first define something known as FoMO or fear of missing out. FoMO, by definition is “a pervasive apprehension that others might be having rewarding experiences from which one is absent. This anxiety is characterized by a desire to stay continually connected to what others are doing.”
While this trend has traditionally been discussed in regard to an individual’s behavior, I can’t help but consider the glaring possibility that this has also begun to affect business ad decisions. I continue to see article after article discussing the challenges that broadcast media is facing. For example, Super Bowl ratings hit a nine-year low for 2018; the Academy Awards saw a 16-percent decline in ratings; and the Grammy Awards experienced a 24-percent audience decline – the lowest in history.
If that’s not enough, according to eMarketer the number of “cord-cutters” – those that canceled their pay TV subscription – and “cord-nevers” – those that have never had a pay TV subscription – reached over 56 million last year. By 2021, the number of cord-cutters and cord-nevers (81.1MM) will outpace the number of current cable and satellite subscribers (79.5MM).2 Additionally, consider the increasing cost of an ad spot while viewership and ratings are down. Yet with all of this data on television, brands continue to pump the lion’s share of their ad budgets into this media channel at disproportionate rates compared to other media channels that are most influencing consumer purchase decisions. I can’t help but wonder – are advertisers and marketers suffering from FoMO? Could it be true? Has the FoMO effect trickled to ad agencies and marketing teams? Why are brands turning a blind eye to this challenged media channel?
Let’s take a closer look using the restaurant industry as an example.
According to eMarketer, TV’s share of total ad spend is projected to decrease by nearly 22 percent in the next four years while in the restaurant category, according to Kantar Media, TV ad spend is holding steady when comparing year-over-year (2016-2017). There is a fundamental disparity in the percentage of the media mix being distributed toward television advertising versus the media channels that hold the higher share of influence on consumer restaurant decisions.
Let me be clear, there is absolutely a place for television advertising in the media mix. What marketers really need to be scrutinizing is the share of total budget that television is getting when holistically looking at a brand’s goals. Is it awareness? Is it traffic and activation? Is it trial? As you can see from the charts, each media channel has a place in the advertising eco-system; however, it’s important to consider the appropriate balance. In many instances you will find there is an opportunity to re-balance your media mix and optimize the budget to use the media channels that are going to make your dollars work smarter and activate consumers, in turn, driving topline sales. In this restaurant example, the data shows that coupons, internet, mail, broadcast and advertising inserts are among the top influencers.
Additionally, a study by the Advertising Research Foundation (ARF) found that brands can increase their return on investment by 19 percent just by moving from one media channel to two and up to 35 percent when using five different channels. Today, half of U.S. consumers use between four and seven touch points. The country’s largest group of consumers, millennials, however, use between eight and 11 touch points. Omni-channel strategies are a must for today’s marketers to succeed in this highly competitive, “steal share” restaurant environment.
Author Jack Dixon once said “if you focus on results, you will never change. If you focus on change, you will get results.” With traffic continuing to be a challenge for many restaurant operators, failure to change, or at a minimum, failure to re-balance media mix, may be putting your brand at risk. It’s time to start reaching consumers through a variety of channels, their preferred channels and within channels that are measurable and proven to drive results.
Take a step back and re-balance your media to achieve the right mix of traffic-driving media tactics versus branding tactics. Be sure to ask yourself when allocating funds toward different media channels: why are we doing this? Is it because we always have? Is it because we think we’ll be left out? Is it most efficient? What is the desired outcome of the media channel we are using? Are the results measurable? Is it just FoMO?