Study: print ads boost sales, but broadcast bolsters brands better

Nation's Restaurant News, Nov 15, 2004 by Gregg Cebrzynski

WINDSOR, CONN. -- Restaurant operators believe that print advertising is more effective than broadcast ads at building sales, but broadcast is better for strengthening brand image, according to a recent survey of attitudes among operators and consumers.

Prepared by Advo Inc. for Nation's Restaurant News, the "Restaurant & Media Usage Study" found that 78 percent of the operator respondents agreed that print ads build sales, compared with 73 percent who said broadcast does the same. Yet print ranked second in other measures, with 83 percent saying broadcast ads build brand image, 82 percent agreeing that broadcast spots raise brand awareness and 69 percent citing broadcast ads as better at building brand loyalty.

The study also found that 58 percent of operators spend between 1 percent and 4 percent of sales on advertising and that 41 percent spend between 5 percent and 9 percent or more.

Overall, the study found that operators' belief in the effectiveness of all types of advertising is justified because consumers use ads to decide when and where to dine out. Print ads can motivate consumers to try new restaurants and to revisit restaurants they have not been to for a while, according to the survey results.

Study results were based on an online survey last January of the Nation's Restaurant News' operator panel. Of the 423 franchisees and corporate media advisers in the casual-dining, quick-service, fast-casual and family-dining segments who received surveys, 251, or 59 percent, responded.

The consumer study, conducted last April, polled 1,918 consumers by e-mail. Respondents were screened based on whether they had decided or helped to decide where to eat during the previous month and had dined out at least four times a month. Surveys were completed by 63 percent of the target group.

Consumers agreed that they rely on print advertising to make restaurant decisions, particularly when the ads contain coupons. Sixty percent of the respondents said they "probably would" eat at a restaurant they don't usually visit if they could use a coupon there, and 20 percent said they "definitely would."

Coupon use across all industries is more popular than it was 10 years ago because more people want to control how much money they spend while still buying the brands they want, said Joella Roy, senior manager of marketing research for Windsor, Conn.-based Advo, the nation's largest direct-mail company.

Brands were "an obsession" with consumers during the late 1980s and early 1990s, she said, but then consumers acquired "shopping savvy," realizing that they could still buy the brands they wanted at a cheaper price if they used coupons.

By the late '90s brands were still important, but "it was how much you pay for something" that mattered more, Roy said.

That attitude drives a consumer's inclination to try a new restaurant if he or she can use a coupon there.

The consumer portion of the study also showed that 51 percent of the respondents preferred receiving print ads in the mail, compared with 26 percent who preferred newspaper advertising and 12 percent who favored Internet ads.

Those preferences probably reflect both the declining numbers of people who read newspapers and the internet's still relatively young age, according to Jim O'Brien, Advo's vice president of category marketing.

Print ads also are a way to make repeat buyers out of new or lapsed customers, according to the survey results, but only if diners have a positive dining experience. When the respondents were asked whether they would return if the experience had been good, 65 percent said they "definitely" would and 34 percent said "probably."

Although 46 percent of operators said they "somewhat agree" and 35 percent "strongly agree" that a combination of print and broadcast advertising works best, "they don't do it that way," O'Brien said.

Forty-nine percent of the respondents said they use a combination of print and broadcast ads, but 30 percent said they use separate print and broadcast campaigns, 16 percent said they use no broadcast advertising and 2 percent said they don't use print ads.

The discrepancy between what operators believe and what they do could be due to operators' knowing how to target their print and broadcast ads separately but not knowing how to use them together to achieve the same targeting efficiency, O'Brien said.

When the respondents were asked how much they agreed or disagreed with the statement that they know who their customers are, 99 percent agreed and 60 percent strongly agreed.

Ninety-seven percent agreed and 52 percent strongly agreed that targeted ads reach consumers effectively.

Although print ads scored high in driving sales, such national chains as McDonald's, Burger King, Pizza Hut and Hardee's long have used broadcast ads, particularly TV spots, not only to strengthen their brand images but also to drive sales.

In addition to gauging media preferences among operators, the study asked consumers how they choose when and where to eat. It's not surprising that 74 percent said they eat at quick-service restaurants when they are in a hurry, and 51 percent said they visit a QSR when they have limited funds.