Goodbye to traditional TV advertising

The vast majority of restaurant marketing is spent on traditional TV advertising. But this model is growing less relevant as consumers spend more time online where they are hard to reach. We believe this over-looked factor maybe contributing to the restaurant industry's soft traffic trends. 

Most consumers are unaware that when they land on a webpage, watch a video, use a mobile app or watch an Internet-connected TV, there is often an auction for ad inventory being run in about 1/10th of one second behind the scenes as the content loads.

A company called Trade Desk provides access to 4.7MM ad spots on average every second for its clients to bid on across millions of different scaled media sources—websites, shows, channels, stations and streams.

If Trade Desk's stock performance (below) is any indication, the restaurant chains may want to reconsider how they allocate their marketing dollars.


Restaurants without seats

Restaurants without seats make more sense than ever in markets with expensive real estate. However, takeout may have to compensate for the high cost of delivery. 

Key points from the Entrepreneur.com article:


  • “The era of the 30- to 50-seat restaurant is over”. “With rents like that, you would have to charge prices nobody wants to pay. And you’re breaking your back to scrape by.” 
  • However, “One of the pressures we’re facing is that our delivery partners aren’t as advanced as we need them to be”. Under Ando’s initial model, the cost of delivering an order was about $6, of which the company charged customers $3 and contributed the rest. Taylor thinks that cost could go as high as $10 in the long term. The underlying economics would be similar if Ando employed couriers directly. 
  • Taylor is hopeful that as demand for delivery increases, so will efficiency, and costs will eventually come down again. But in the meantime, the business is accepting orders for delivery as well as takeout


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