The State of Digital Video: Quick Service Restaurants

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Digital video is super-sized. According to comScore, 87% of the U.S. online population watches digital video — every month, nearly 200 million people watch a combined 88 billion videos.1 While TV growth has slowed in recent years, digital video consumption has nearly doubled.2

So where are consumers viewing digital video? Everywhere. More than one-third of U.S. consumers own a trio of tablets, smartphones and laptops3, creating new opportunities to connect. Consumers are now true multi-taskers, moving seamlessly from screen to screen. They are watching digital video at home, on the road, and in the air. In response to this evolution, programmatic video advertising—the use of software to automate the purchase of highly targeted digital video advertising—is becoming increasingly relevant. According to our original research, BrightRoll 2015 Agency Survey4, programmatic spend is expected to increase over 50% this year.

This report focuses on how Quick Service Restaurant (QSR) advertisers can embrace the increasing presence of digital video in the lives of QSR consumers. With a solid understanding of the environment in which “fast foodies” live, advertisers and retailers can pave new (digital) paths to success.

Get to Know Your “Fast Foodie”According to a survey conducted by Gallup, 96% of the U.S. population eats fast food. Sixty years ago, the QSR industry was driven by convenience, ease, and affordability. Today, those same values unite modern QSR consumers. When surveyed on their top reasons for eating fast-food meals in 2005, nearly all consumers cited speed and accessibility. A decade later, those core drivers remain consistent. According to a poll by FoodThink, the majority of frequent QSR consumers say fast food simply “fits into their busy lifestyle.”

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According to comScore, 87% of the U.S. online population watches digital video — every month, nearly 200 million people watch a combined 88 billion videos.1

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Young Adults

Busy and on a budget

38% rarely plan ahead for meals and indulge in convenient alternatives to preparing fresh food8

21% of budget is spent on food9

43% of food budget is allocated to QSR10

Active and on the go

25% are very busy and frequently eat on the run11

27% value nutrition and fresh ingredients, but often

need to quickly and cheaply provide for their kids12

65% of Millennial moms find convenience important when making everyday purchases13

Growing and consuming

34% of Hispanic households seek variety on a budget14

69% say that restaurants are an ideal place to spend

time with family15

37% believe that healthy decisions and convenience

can go together16

Mothers Hispanics

Three noteworthy QSR segments:

QSR consumers of all types have evolved as the digital media landscape has matured and taken shape. Technological advancements have disrupted the ways

in which people communicate, shop, consume media, and more.

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People who visit QSRs at least once a month consume more digital video than the general population

20% more likely to stream over 20 videos per day19

63% watch digital video in an average week20

Comprise over 80% of the video-viewing population18

of the

45% use a smartphone as their primary device to

stream video22

Watch over 25 hours of video per month17

Spend 15% more time watching digital video than non-QSR eaters21

Furthermore, mobile allows QSR brands to interact with restaurants’ target consumers. “Fast foodies” constantly turn to their smartphones and tablets, accessing the internet and consuming media whenever a free moment presents itself.23

So how does this play out in our three key segments? Mothers leverage mobile as a means to accomplish practical tasks and also “grab fragments of ‘me time’ throughout the day.”24 Young adults often spend more than two hours a day on their mobile device texting, surfing, talking, and tweeting,25 and 90% of Millennials say their phone never leaves their side.26 Hispanics are nearly 20% more likely to browse the web on their mobile device — according to Nielsen, this segment watches an average of 8 hours of video online per month, 75% of which is consumed on mobile devices.27

Given their high video consumption and on-the-go lifestyles, the potential to reach “fast foodies” on mobile is clear. While mobile spend accounts for 16% of total digital video spend, desktop makes up the vast majority, which suggests that media planning has to catch up to actual cross-screen behavior.28

So, how can your brand leverage these untapped opportunities? In the following sections, we’ll dive deeper into QSR potential.

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What’s on the Menu? Digital Video. Digital video can convey a wide variety of messages, whether a QSR is looking to enhance their brand, showcase new menu items, or strengthen their connection with consumers.

Combining sight, sound and motion, video can communicate messaging and build emotional connections more effectively than static images. At BrightRoll, our research team recently studied video ads from the top 10 QSR advertisers. We found that eight of those 10 used video for branding purposes, not only to promote specific products. Video is a powerful way to build brand preference, loyalty, and affiliation.29

As AdAge points out, marketers are using video to “align their corporate images with the cultural landscape and provide value-added entertainment wherever possible.”30

The ability to identify specific consumer segments and customize — even personalize — the advertising experience is the key to such connection.

Thanks to programmatic advertising, advertisers are able to reach consumers in real time, based on specific demographics, values and lifestyles, geo-locations and other targeting elements. As such, brands can better connect and communicate with the right audience, at the right time, on the right device. In fact, when agencies are asked to name the most valuable aspect of digital video advertising, 56% put targeting capabilities at the top of the list.32

Many consumers, especially millennials, are looking for meaningful relationships with brands that are relevant to their lives.31

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Menu info is top of mind

Mobile coupons draw in fast food eaters

Location targeting converts hungry QSR consumers

Menu information in a mobile ad is the factor most likely to influence restaurant choice.36

55% of consumers use mobile restaurant apps to check menus and pricing.37

QSRs can strengthen conversions by including directions to online menus, and/or advertising new menu options and limited time offers.

Fast food consumers are nearly 20% more likely to use digital coupons than the general population.38 College students and mothers, for example, both find mobile coupons enticing.39,40

QSRs can attract potential consumers by offering coupons and deals in their ad campaigns.

Marketers view location-based ads as the most effective mobile advertising strategy.41 Considering that QSR consumers rarely plan ahead for meals, reaching this segment on the go presents an opportunity to drive in-store purchasing.42

By geo-targeting potential consumers and offering location-based deals, QSRs can lure the most impressionable audience demographics.

Recent research from Yahoo! and Interpublic Group suggests that consumers expect more personalized experiences on their mobile devices — 55% of consumers prefer receiving customized ads.33 When it comes to digital video ads, Interactive Pre-Rolls (IPRs) specifically can help convey entertaining messages in a highly customizable way. On BrightRoll’s DSP, we saw a 20% YOY increase in food-related campaigns using IPRs in Q1 2015, and over 65% growth in spend on IPR units.34

Increased usage of IPRs is likely due to its strong performance and engagement rates among viewers. On BrightRoll’s platform, we see especially high completion rates from IPRs. Mobile Ad Canvas IPRs — digital video advertisement overlays which can direct viewers to menus, membership clubs, restaurant directions, and more — show the highest CTRs, up to 3x higher than any other IPR format.35

Attract QSR customers Video advertising is one of several ways to successfully target QSR customers. The chart

below demonstrates how menu information, mobile coupons, and location-based ads can help brands complement their video ad component and extend their reach to consumers.

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What’s Happening in the Market?% of US agencies that say the majority of their RFPs will include a video ad component in 2015

% Selecting “Majority”

26%

48%

87%

2011 2014

Advertisers are already beginning to capitalize on digital video opportunities, as illustrated in the growth of video as a part of Request for Proposals (RFPs) according to our original research, BrightRoll 2015 Agency Survey. Furthermore, QSRs have shown a greater allocation of budget dedicated to mobile activity. However, mobile spend remains small when compared to desktop activity. In fact, digital ad spend across the board is less than TV spend, although digital has an increasing presence in the lives of QSR consumers.

43%INCREASE IN QSR DIGITAL VIDEO AD SPEND47

2xTHE PROPORTION FOR QSR MOBILE SPEND COMPARED TO THE BROADER FOOD/BEVERAGE/DINING CATEGORY48

What’s Next?Multi-tasking across screens is the norm among core QSR customers, but measurement across screens has been a true challenge for advertisers. As a result, advertisers have been slow to adapt to a scalable multi-screen approach. While some QSR advertisers are ahead of the game, demand for reliable measurement remains high. Today, thanks to advancements in measurement capabilities, advertisers can not only capture cross-screen viewing and track how digital campaigns impact consumer spending, but also determine how campaigns impact store visits to a given QSR chain.

While traditional media is still influential in delivering brand messages, the ever-evolving, data-driven digital video landscape will bring QSR advertising to new heights. Now more than ever, advertisers can convey customizable and scalable messages to various audiences via digital video everywhere, and measure its impact online, offline, and in line.

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1 comScore, Video Metrix Key Measures Report, January 20152 Nielsen, Shifts in Viewing: The Cross-Platform Report Q2 2014, September 2014 3 Deloitte, Digital Democracy Survey 8th Edition, 20144 BrightRoll, BrightRoll 2015 Agency Survey, December 2014 5 Gallup, Fast Food Still Major Part of U.S. Diet, August 3, 2013 6 CBS News, Top 11 Reasons for Fast Food’s Popularity, December 3, 20087 FoodThink, QSRs and America’s Changing Tastes, May 19, 20148 Experian Simmons, Simmons Connect Winter 2014 Study, 20149 eMarketer, Hungry Teens Spend Most on Food, April 23, 2014 10 eMarketer, Hungry Teens Spend Most on Food, April 23, 2014 11 Experian Simmons, Simmons Connect Winter 2014 Study, 2014 12 Experian Simmons, Simmons Connect Winter 2014 Study, 201413 BabyCenter, 2014 US Mobile Mom Report: Small Screens’ Big Influence on Moms’ Path to Purchase, November 201414 Experian Simmons, Simmons Connect Winter 2014 Study, 201415 QSR Magazine, The Many Faces of the Hispanic Market, October 2014 16 Experian Simmons, Simmons Connect Winter 2014 Study, 201417 comScore, Video Plan Metrix Key Measures Report, December 2014 18 comScore , Video Plan Metrix Key Measures Report, December 201419 comScore, Video Plan Metrix Consumer Target Profile Report, December 201420 comScore, Video Plan Metrix Consumer Target Profile Report, December 201421 comScore, Video Plan Metrix Key Measures Report, December 2014 22 Experian Simmons, Simmons Connect Winter 2014 Study, 201423 Experian Simmons, Simmons Connect Winter 2014 Study, 2014 24 eMarketer, Is Multitasking with Mobile Helping Mothers?, November 19, 2014 25 USA Today, Millennials LOVE their smartphones: Deal with it, September 27, 2014 26 USA Today, Millennials LOVE their smartphones: Deal with it, September 27, 2014 27 Google, Your Next Big Opportunity: The U.S. Hispanic Market, July 201428 BrightRoll, Internal Data, 201429 BrightRoll, Internal Data, 201430 Adweek, Marketers’ New Tactics in the Food Label Wars: Health takes a backseat, June 17, 2014 31 Mintel, Marketing to Millennials, February 201532 BrightRoll, BrightRoll 2015 Agency Survey, December 2014 33 eMarketer, Customers Hungry for New Menu Items Seen in Mobile Ads, February 2014 34 eMarketer, Reasons that US Internet Users Use Mobile Restaurant Apps, March 27, 2014 35 comScore, Video Plan Metrix Consumer Target Profile Report, December 201436 eMarketer, Products/Services for Which US College Students Would Accept Mobile Coupons via Text Message, by Phone Type, February 26, 201337 BabyCenter, 2014 US Mobile Mom Report: Small Screens’ Big Influence on Moms’ Path to Purchase, November 201438 eMarketer, Mobile Ad Effectiveness, August 21, 2014

39 Experian Simmons, Simmons Connect Winter 2014 Study, 201440 Yahoo! & IPG Media Lab, Going Deeper: What Consumers Really Want from Personalized Ads, 2014 41 BrightRoll, Internal Data, 201442 BrightRoll, Internal Data, 201443 BrightRoll, BrightRoll 2015 Agency Survey, December 201444 BrightRoll, BrightRoll 2015 Agency Survey, December 201445 BrightRoll, Internal Data, 201446 TechCrunch, 2015 Ad Spend Rises to $187B, Digital Inches Closer to One Third Of It, January 20, 201547 SMI Dataminer, 201448 BrightRoll, BrightRoll 2015 Agency Survey, December 2014

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reports@brightroll.com | brightroll.comUnited States | Europe | CanadaCopyright ©2015 BrightRoll, Inc.

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ads served. As a result, BrightRoll technology collects and analyzes hundreds of billions of data points monthly enabling real-time decisions that drive ROI for advertisers.

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