Situation:
A regional Fast Casual restaurant chain wanted an independent and objective review of their competitive media spending. The company had made some significant shifts in their media mix, while holding total spending unchanged. So they wanted to know how their media mix stacked up against both their primary and secondary competitors and their competitors’ media mixes.
Our Approach:
We began this project by reviewing all available competitive media spending research to ascertain whether we could capture accurate and reliable media spending. Since there are multiple sources from which we could gather this market specific data, we reviewed several sources and ran comparisons against our client’s actual spending. We also felt that there were additional competitors that should be looked at beyond the ones our client specified.
An additional part of this competitive media spending analysis was to assess the competitive advertising-to-sales ratios, and included comparisons of share of market sales and share of locations.
Findings:
The company had reliable media spending research already available. However, we sourced additional competitive media spending that filled in some holes in the existing research. This gave us the ability to provide a more comprehensive composite analysis.
Our review of the competitive media spending included a media mix comparison. We found that not only was our client being outspent in total by several major competitors, but that they were also being outspent significantly in the primary media vehicles needed to increase sales and transactions. We also found that our client was being outspent by competitors who had a lower share of market and lower share of locations in their most important markets.
An analysis of marketing/advertising spending ratios confirmed these findings and illustrated the gap between our clients spending ratio and their competitors’ spending ratios. We also illustrated the changes in these gaps, as well as the changes in competitive media mixes from year-to-year.
Results:
Upon sharing our findings and our recommendations with the company, our client immediately instructed their media buying service to revise the media mix for the balance of the year in order to be more competitive in their primary media vehicles. Our client also communicated new media guidelines for moving forward.
Based on our analysis and recommendations, our client considered increasing their media spending ratio to be more competitive in their major markets. However, economic conditions at that time, prohibited them from immediate action.
The results of this project provided the company with a truer picture of the competitive landscape and helped them gain a greater understanding of not only how much their competitors were spending, but also “where” their competitors were spending their media dollars.