Players in the Quick Serve Restaurant (QSR) space will spend almost $4.5 billion on local advertising this year, according to a BIA Advisory Services report, “Insights into Local Advertising—QSRs.”
The QSR category (frequently called “fast food” by the masses) includes a vast array of household names like Subway, McDonald’s, Burger King, KFC, Taco Bell and Wendy’s, in addition to many lesser known regional and local favorites. It’s an industry estimated to be worth more than $270 billion.
The category is a major radio spender. In 2019, McDonald’s, Subway, Wendy’s, Taco Bell and Dunkin were among the Top 60 largest radio advertisers, based on spot volume, according to Media Monitors, which tracks advertising in 85 markets.
The 2020 local advertising spend outlook is up from $4.3 billion last year. BIA expects the total to reach $5.8 billion in 2024.
BIA says that while legacy media channels garner more than half the QSR spend, the growth is coming primarily from digital media. Most of it goes to direct mail (19.5%) and mobile (19.3%), which is ascendant.
By 2024, BIA expects mobile to have the largest market share at 24.7%, with direct mail’s cut falling to 14.4%. Mobile’s 2020 spend alone represents an increase of $134 million over last year.
Broadcast radio ($430.7 million) is one of just two platforms in traditional media that are forecast to see a 2020 increase (direct mail is the other), albeit one that’s essentially flat: 0.2%. Meanwhile, online radio ($48.2 million) is anticipated to grow 1.9% over 2019.
Radio and over-the-air (OTA) TV are both expected to see receding market share to 2024. But the decline, BIA says, won’t be as sharp as direct mail’s.
The shifting QSR local advertising spend comes against the backdrop of declining same-store sales for the broader industry. They fell 2.1% on a year-over-year basis in December. Part of that decline is being blamed on a shift in the recording of the Thanksgiving holiday.
The result marked the industry’s worst performance in more than two years, according to Black Box Intelligence, which analyzed data from some 47,000 restaurants with $75 billion in annual sales.