Fast food and casual dining outlets appear to be moving TV advertising dollars out of TV stations and into the national outlets this spring and summer. Spot may be down double digits in the second and third quarters in the meat-and-potato category.
Fast food and casual restaurants appear to be shifting advertising dollars away from TV stations at a double-digit rate this spring and summer, making a tough national spot business even tougher.
The restaurant category is pacing down in spot as much as 10% in the third quarter compared to the quarter last year, according to a TVNewsCheck survey of station groups and reps. And that follows a 13.1% year-over-year dive in April and May, says ad tracker TNS Media Intelligence. (Full second-quarter data from TNS is not yet available.)
The spot shortfall is not because the restaurants aren’t spending, at least not in April-May. In fact, TNS data shows, the category was up 6.4% to $685.9 million in total TV spending in the two months compared to last year.
Spot money is clearly moving elsewhere. TNS figures show restaurant spending in April-May was up in broadcast network (10.5%) cable network (16.5%) and syndication (53%).
“Our spending levels are the same, but the distribution levels have changed,” says Priscilla Hoe, brand group director, Horizon Media, the ad buyer for Jack in the Box.
The national fast food chain added national cable to its second- and third-quarter media schedules for the first time, Hoe says. “Broadcast ratings are in decline and spot broadcast should be priced better; that’s what made us look at national cable.”
Angela Mailloux, Los Angeles broadcast group director, Horizon Media, explains further: “We will be putting more money into cable over the summer, because that’s where the viewers are,” she says. “Not only does cable have a younger demo, but, in getting a network viewer, we’re also getting the benefit of reaching people who are traveling.”
At Jack in the Box rival Taco Bell, the story is the same. “The fact that cable runs new programming in the summer is something that Taco Bell does recognize,” says Juliet Corsinita, director of media services for the company. “As viewers seek out new, relevant programming options in cable, we want to follow them there.”
Overall, Corsinita adds, Taco Bell is spending more on TV this summer than last.
McDonald’s is also part of the trend. “We are moving money,” says Bob Galietti, senior vice president/group account director, MPG Arnold, who does McDonald’s ad planning for the Northeast and Midwest regions.
“The media mix aperture has opened up, what with digital, cell phones, VOD,” he says. “So we need to move money away from the traditional 30-second—and we may move some money to spot cable.
“Cable runs a lot of original programming in the summer, while broadcast runs repeats,” he says. “That’s based on ratings.”
Other, smaller fast food chains are breaking their spot-only habits as well.
Buffalo Wild Wings has gone from 100% broadcast spot in 2005 to a 75% broadcast spot in 2006, says a buyer for the small fast-food outlet who asked not to be identified.
National cable is picking up the business because it is “all about bells and whistles and sponsorships,” she says. “Plus, it has better programming inventory to sell you. You’re in there with other national advertisers.”
Last year, the restaurant category for national spot was down 3.1% to $1.3 billion compared to 2004. Given what’s happening in the second and third quarters of this year, the category is likely to be down again. That negative 3.1% might look good to broadcasters in retrospect.