Restaurant Media & Advertising: A Case Study
In the face of daunting media costs and demand for justification, a leading national QSR used APT to optimize media support for a major product launch.
- Using APT’s technology, the client designed a first wave of launch to vary media channel and level.
- The learnings from the first wave showed that only TV support was effective, up to a certain level, and only in particular markets.
- Subsequent launch was tailored to specific markets and resulted in $15MM in incremental net income.
The Company
A leading franchised QSR chain
The Challenge
A leading quick service restaurant chain was planning to launch a major new product nationwide, and it anticipated using a large media budget to support the launch. Large franchises in several field regions differed in their perceived values of media spend in their particular geographies. Due to the expected hard media costs, the franchises looked for evidence of the effectiveness of the proposed advertising strategy. The client was already testing to determine the optimal price point for the new product and used a Test & Learn™ strategy for media spending as well.
The Solution
The client looked to APT’s proprietary software to assist in optimizing the size and allocation of their media spend.
APT and the client worked together to determine which questions the client felt were most critical: What medium, how many GRPs, and in which markets? The client was also unsure of the interaction effect between marketing in different media such as TV, print, and radio. With these questions in mind, a number of specific advertising packages were outlined and tested in multiple markets.
Based on the results of the market tests, APT found that TV support was effective only up to a specific level. In addition, the heavy-up advertising approach was most effective in certain market types. The restaurant chain was able to target its advertising spend accordingly, saving money by eliminating less-effective media spend while still providing the necessary levels of visibility for a successful product launch.
The Results
Following the product’s rollout, the market-specific approach to advertising was determined to be highly effective with an estimated impact of over $15MM in incremental profit.
