Companies of all sizes today are looking to improve the effectiveness of their social media marketing — and with good reason: Digital platforms are constantly innovating the way that brands are discovered, shared and experienced. The data speaks for itself: The number of worldwide social network users is expected to reach 3.09 billion monthly active users by 2021, and global internet users spend some 136 minutes per day surfing social networks.
Many organizations have responded by allocating more resources to digital marketing — technology now accounts for 29% of total marketing expense budgets, according to a recent Gartner estimate, and digital ad spend for 2020 is estimated at about $385 billion.
Yet these numbers are a double-edged sword. Consumers today react to products, services and ad campaigns in real-time through social media, creating new demands on organizations. Generating and sustaining high levels of engagement and enthusiasm online requires clarity around the firm’s goals and values.
Successful digital strategies are not about aesthetics or style, but a fit between what your brand promises and delivers. To develop your strategy, ask yourself the following questions:
1. What are your goals?
In the case of startups and niche products, your social media marketing strategy may begin with the need to test ideas, create awareness and build anticipation for new products and services. In other cases, the goals can be far more specific — boosting sales, geographic expansion, increasing real-time brand engagement, or generating quality sales leads.
Once you’ve set your goals, identify your metrics for success. Are you looking to gain “likes”? Do you want to spark an online dialogue around an issue? Or do you want to inspire behavior change, for example, encouraging your followers to recycle? Your metrics must align with your marketing goals.
The sheer volume of available data can make this task challenging. Clearly defined metrics, including a timeline and budget, will ensure that your campaign is on track. Not only do goals allow you to clearly measure your progress, they will also give you a clear answer to the next question that you need to ask which is…
2. Which platforms should we be using?
Decision making around platforms must be rooted in an understanding of your customer’s identity and preferences. Different social platforms appeal to different demographics, and you need to do the research to find out where your target audience hangs out online. For example, younger audiences may be more effectively reached on newer platforms, like TikTok or Snapchat. Health and wellness brands, with their emphasis on aesthetics, may want to develop on a more visual strategy, focused on Instagram. The same logic applies to geography — WhatsApp is popular in India, whereas if you want to reach people in China, you’d need to focus on WeChat or Weibo.
3. What is your content strategy?
Quite often, organizations have the budget, team, agencies, and ideas in place, but they have haven’t thought deeply about content. This leaves both revenue and goodwill on the table: One survey revealed that 46% of consumers reported they follow brands because of the inspirational content. You need to understand what types of content — for example, articles, video, pictures — will drive engagement with your audience. Great content strategies create conversation and sharing with the brand and amongst other users.
Your content should be unique, useful, and shareable. For example, one of the authors (Deepa) is currently working with ArogyaWorld, a global health nonprofit, on a campaign to help establish some common understanding around “eating right” in India. Inspired by the U.S. government’s MyPlate.gov initiative, we worked with a leading design firm to translate the Indian government’s complex nutritional guidelines into a simple picture for both North and South Indian cuisine, showing cooked quantities and meal plan options for various ages and lifestyles. The graphic will be rolled out on social media and in its Healthy Workplace program that cover 3 million employees.
If your content is sensitive, your content strategy should take that into consideration. For example, Techdivine, a firm owned by one of the authors (Ananthanarayanan), once worked with a client in the mental health industry who was concerned about the lack of engagement on their Facebook page. It quickly became clear that most users were not comfortable engaging on this issue on a public platform. We re-oriented the strategy to encourage users to chat with the brand by using private messaging options of social networking sites. We also created resources which allowed people to get answers to their questions securely with expert articles shared via exclusive password access through private chats on social networking platforms.
4. Are you ready to talk with your audience
— in real time?Social media interactions are two-way — driven by both brands and consumers — so your organization needs to show that it is listening and engaging with questions, concerns, and suggestions. Companies that seize a moment can generate brand awareness and goodwill. For example, when a Twitter user recently mocked a South African man who proposed in a KFC, the fast-food chain responded by providing the couple with a wedding planner. Many other brands, including Coca-Cola, Woolworths and Audi, also chipped in to support the couple, showering them with gifts and experiences.
Social media offers brands the opportunity to create memorable experiences. Techdivine, a firm owned by one of the authors (Ananth), once saw a tweet from someone travelling from Manhattan to Chicago for the first time, mentioning that she was looking for something spicy to eat. We looked back at her earlier tweets, which hinted at an interest in arts. So, on behalf of our client, a restaurant based out of Chicago, we welcomed her to the Windy City and even shared links to some interesting art events and activities around the city. We made sure, not to pitch our restaurant prematurely.
Curious to know who we were, she thanked us for our tweet and inquired about our restaurant. At this point, we sent her a beautiful collage of some popular spicy dishes that the restaurant served, along with a map and a deal she could unlock if she visited the restaurant and tagged the brand by checking in. Needless to say, what followed was a visit, not only from her, but many others who saw this conversation online.
Brands today, have a much bigger ability (and responsibility) to inspire and connect with consumers. Trusted brands are more likely to attract business, and social media is a powerful tool to create engagement, gain feedback, and build that trust with your audience. By answering the above questions, you can ensure that your social strategy aligns with your goals and adds values for your users.
Foot traffic is flat as digital dominates top-line growth.
Purchases are shifting from individual brands to marketplaces.
Mobile influences the purchasing and ordering process, regardless of whether the product is ultimately delivered or picked up in-store.
Scale economies help big players, and brand affinity helps hyperlocal players compete – while brands in the oversaturated middle struggle to differentiate.
Rewards and loyalty programs are being retooled to drive personalized offers and promotions to acquire and retain customers.
Logistics and delivery are now make-or-break, as consumers have many options to find and purchase the same or similar products.
Just like retail, this is the state of the restaurant industry as we kick off 2020: caught in the throes of a digital reinvention as the role of the physical footprint is being rethought, and as tech plays as much of a starring role in its top- and bottom-line success as the products it produces and delivers.
Restaurants on the Digital Chopping Block
Like retail, the restaurant industry is rethinking its product, merchandising and delivery model to balance the consumer’s desire for a great experience with their demand for efficiency and convenience.
Like retail, the industry is adjusting to the changing preferences of increasingly time-challenged consumers living in increasingly connected homes, who like the experience of a restaurant meal – only eaten at home.
It’s an industry, like retail, that is faced with new competition – the direct-to-consumer brands that leverage mobile, scaled efficiencies in food preparation, new contextual commerce channels and logistics providers, threatening to destabilize how the traditional players keep their customers and find new ones.
And like retail, the restaurant industry is struggling to find the balance between teaming up with aggregators that provide reach, distribution and marketing efficiencies with the economics of paying as much as a third of the order value to these aggregators to market, deliver and process orders for customers.
And where the aggregator is intensifying competition for the customer by putting so much choice at the diner’s fingertips.
None of these issues are new, but the conversation about them took a new twist last week.
That’s when the news broke that Grubhub was pursuing a number of strategic options, including a sale, in an effort to deflect the potential attention of an activist investor. Its stock price rose by more than 17 percent on that news, and Uber’s stock price saw a slight uptick. Grubhub later denied such claims, after which its stock took a drubbing from presumably disappointed investors.
You don’t have to be a stock market analyst to interpret their reaction: that the food delivery space would be better off with fewer players burning cash to find and keep consumers and restaurants onboard – and that maybe Grubhub found a buyer to kick off that consolidation trend.
Grubhub saw its market cap reduced to $4.79 billion on Jan. 10, 2020, down from a high of $13 billion in September 2018 and $7.3 billion this time last year. Investors seem to be losing confidence – and patience – in the firm’s ability to find its way to profits and scale.
The Restaurant/Aggregator Fork in the Road
Restaurants and aggregators are at an interesting crossroads.
Restaurants are trying hard not to follow in the footsteps of their retail brethren a decade or so ago, when they ignored the impact of digital, mobile and voice – and the proliferation of connected devices –on their businesses.
Many recognize that, although small in terms of percentage of sales, the digital and delivery channel is growing more rapidly than visits to physical establishments. And in an effort to not miss out on those trends, they are following the classic digital commerce playbook: Be where the consumers are.
And if the consumer is going to aggregators to find stuff to eat and have delivered, instead of walking into their establishment to order or sit down at a table to eat, they need to make sure that they are there, too. It’s actually not an unfamiliar move – many restaurants paid to get on OpenTable, Yelp, and other reservation platforms years ago in order to fill seats in their dining rooms.
At the same time, accommodating this digital shift puts new pressure on those restaurants to anticipate demand from these new and unfamiliar channels, and to prepare those orders for delivery 30 to 40 minutes from when they are placed.
All while tracking and juggling the orders across the variety of aggregators they may support, and while ensuring that the quality of the food, when delivered, meets the consumer’s expectations for that order.
And do it without jeopardizing the experience of those who are in the establishments ordering, or are seated at a table to eat. That’s still the preponderance of their sales – not to mention the ambience and vibe that builds customer loyalty and repeat visits.
Aggregators have their own issues to address.
Grubhub CEO Matt Maloney told The Wall Street Journal in October of 2019 that the delivery space was “in some sort of a weird bubble ready to burst” after reports that restaurants were pressuring aggregators to lower fees and boost marketing and promotion for their brands. The race to the bottom for the aggregators competing for that business was described by restaurant operators as “dialing for dollars,” with the bigger brand names calling the shots and naming the terms.
Maloney also told investors during Grubhub’s Q3 2019 earnings call that the delivery space was commoditizing, as delivery capabilities – along with the supply side of the platform – looked largely similar across all of the aggregators. The opportunity for differentiation, he said, was on the diner side, where efforts to find and keep “promiscuous diners” loyal was the ticket to their top-line growth and profitability.
Of course, it is ultimately the consumer who decides the winners and the losers, and all platforms need buyers to thrive and survive. But consumers are only loyal to marketplaces that have enough density of supply to attract them the first time and keep them on board. Restaurants are the supply-side of the platform, and the reason consumers try out an aggregator in the first place – and why they hopefully stick around.
Keeping restaurants on board, and paying enough to keep the platform afloat, is a big part of delivering that diner’s experience – and is potentially the restaurant aggregator’s biggest vulnerability.
Your Margin Is My Opportunity
Aggregators make money in several ways: the demand generation or marketing fees they charge restaurants on the platform to drive demand, their delivery fee and their order processing fee.
Aggregators, however, make their margins one way – and that is on the marketing fees they charge on the supply side of their platform to drive demand, which is reportedly roughly 20 percent of the ticket. The big brands aren’t contributing to that because they don’t need aggregators to build demand – they just need them to deliver their food. Aggregators keep the big brands on board as anchor tenants that attract consumers and drive consumer demand, but don’t really pay the freight.
Smaller restaurants do pay – and represent a big chunk of aggregator margins today.
These small brands don’t have the wherewithal to subsidize food orders, buy TV ads, blast social media with clever marketing campaigns, or otherwise let consumers know what they are doing and what new menu items are on offer. They probably haven’t invested in mobile apps, and perhaps have only bare-bones rewards and loyalty programs that lack the personalized experiences that create important touchpoints for their loyal patrons.
Like small, third-party sellers on Amazon, these small restaurants will pay to participate if they want to be online, and they believe their investments will deliver enough incremental volume from enough customers to fill in the gaps. And hopefully, they can somehow transition repeat customers into their own, less expensive digital channels over time.
Restaurants make their money, of course, by getting more butts in seats (at the restaurant or at home), which is why demand gen from aggregators can be valuable – at the right price, given their costs.
Restaurants could make more money and margin if they could find a way to get their costs of producing the food down and expand their capacity. New businesses models are giving restaurants of all sizes that chance.
Delivery-only (aka ghost) kitchens can expand existing restaurant capacity for delivery-only orders without compromising the dining experience in their establishments. This opportunity to handle delivery-only orders in delivery-only facilities gives restaurants more control over the margins made on those orders and more chances to add incremental volume to their business.
Large restaurant chains are creating their own delivery-only kitchens, and some are closing less trafficked storefronts to do that and drive higher margin orders. New ventures, like Travis Kalanick’s CloudKitchens, operate these kitchens without any physical restaurants.
In a ghost kitchen model, it isn’t clear that there’s much room for restaurant aggregators to drive margin from demand gen fees. As more food orders move to ghost kitchens, that could be large enough to do their own marketing, aggregators are mainly providing delivery – a nearly commodity service.
Today, restaurant aggregators are both marketing and logistics platforms trying to create density on both sides. For as much progress as they’ve made, they are still quite small – 22 million active diners and 140,000 restaurants across 2,700 cities for Grubhub, for example. The challenge for them, and others, is building enough of a critical mass of hyperlocal demand and supply to create a profitable business just around restaurant delivery. And drive enough volume at the right price points to the smaller establishments to keep them interested, on board and paying to get notices.
At the same time, tech and software platforms are giving all restaurants new ways to get noticed – at the expense of aggregator demand gen margin.
Google is using a third-party platform to power order-ahead and delivery for restaurants that consumers discover when they search for places to eat near them – leveraging aggregators’ logistics expertise to deliver the meal, but little more. This traffic, directly to the restaurant site, provides an opportunity to convert a browser into a buyer, and create a relationship without an intermediary in between. Loyalty and rewards platforms that are integrated into the restaurant’s point of sale are helping even the smallest restaurants to embed loyalty with payments and create seamless, personalized experiences and a valuable digital touchpoint, as well.
Most expect Amazon to enter this space at some point, leveraging their 300 million Prime Member consumer engine, demand gen and logistics expertise to capture more share of the consumer’s spend on food. Amazon has scaled back its restaurant order and delivery plans over the last several years here in the U.S. but has made a strategic investment in U.K.’s Deliveroo. But Amazon owns Whole Foods, says it will open a new chain, has opened Amazon Go, with plans to open more, delivers groceries for free for Prime Members, has expanded their meal kit business, and makes it easy to order and refresh pantry stables from its website. Amazon and Google, both, have the potential to be the aggregator for food – not just the narrow vertical of it called delivery.
As we have seen from the retail reinvention over the last decade, the future of the restaurant aggregation space isn’t an either/or proposition, but one in which tech and logistics proficiencies increasingly drive consumer preference. Aggregators will be pressured to examine where they can drive the most efficiencies and get profits and scale. Maybe that’s by being marketing and delivery for restaurant takeout. Maybe that’s by being hyperlocal delivery across numerous verticals – helping retailers across all verticals solve their last mile challenges.
What’s obvious is that consumers like the new way of using digital channels to find and order their food – whether that’s to order ahead for pickup, make a reservation to dine in the restaurant or have it delivered to the places most convenient for them to eat it. But like physical retail, the restaurant industry itself seems ripe for disruption.
Just as there were opportunities for pure online retail with no physical stores, there will be opportunities for pure online food delivery without physical restaurants.
There will be opportunities for large players to operate large, online (delivery-only) kitchens and physical chains – using more economical facilities to prepare food for delivery for a single order or for catering and even tailoring menus to make those options more efficient and profitable.
Unfortunately, many small, independent restaurants, are caught in the squeeze. Cheap delivery, mobile ordering, and restaurant aggregators create a new powerful type of competitor, even if they, today, provide a channel that gets them playing the digital game.
Small restaurants can participate, too, just like specialty boutiques have survived – but not all will make it through. They may be the ones driving the aggregators’ margins today – but like the stores that lined the malls between the anchor stores in the physical malls, they are at risk, as the big players find new places to meet customers, leaving smaller players to fend for themselves in ghost malls.
Is your marketing budget tiny – or non-existent?
It's a common problem with local businesses who put everything they make into inventory and payroll. If you don’t have much to spend on marketing, you might wonder how you can ever grow your business.
The good news is that there are plenty of things you can do to attract new customers without spending a dime.
I’ve compiled 5 of my favorite free marketing ideas for you to try:
There’s a lot to love about marketing your restaurant in February. Valentine’s Day and Super Bowl Sunday are always two important days for restaurants, but February is also Cherry Month, Heart Month and Hot Breakfast Month. And it doesn’t end there.
For beverage marketing, pour up something special on Cafe Au Lait Day, Kahlua Day, Margarita Day and Open That Bottle Night. Beyond beverages, Cafe Au Lait Day and Kahlua Day also offer yummy recipe opportunities such as Cafe Au Lait Cheesecake and Kahlua Pancakes.
In addition to Ice Cream for Breakfast Day, February serves up some exciting menu marketing opportunities with Almonds, Bagels & Lox, Baked Alaska, Banana Bread, Carrot Cake, Cherry Pie, Chili, Chocolate Covered Peanuts, Chocolate Fondue, Chocolate Mint, Chocolate Souffle, Clam Chowder, Crab-Stuffed Flounder, Cream Cheese Brownies, Crepes, Fettuccine Alfredo, Frozen Yogurt, Gumdrops, Homemade Soup, Molasses Bars, Peppermint Patties, Pistachios, Pizza Pie, Plum Pudding, Sticky Buns, Strawberries, Tortellini and Tortilla Chips.
Fun marketing days include Groundhog Day, Super Bowl Sunday, Boy Scout Day, Make a Friend Day, Get Out Your Guitar Day, Do a Grouch a Favor Day, Random Acts of Kindness Day and Tell a Fairy Tale Day.
Here’s your restaurant marketing calendar for February:
Hot Breakfast Month
National Cherry Month
National Chocolate Lovers Month
National Grapefruit Month
National Potato Lovers Month
American Heart Month
Library Lovers Month
1 – National Baked Alaska Day
1 – Decorating With Candy Day
1 – National Dark Chocolate Day
1 – Ice Cream For Breakfast Day
2 – National Tater Tot Day
2 – National Crepe Day
2 – Groundhog Day
2 – Super Bowl Sunday
3 – National Carrot Cake Day
4 – National Homemade Soup Day
4 – National Stuffed Mushroom Day
4 – Thank A Mailman Day
5 – National Chocolate Fondue Day
5 – World Nutella Day
5 – National Weatherperson’s Day
6 – National Frozen Yogurt Day
7 – National Fettuccine Alfredo Day
7 – Send A Card To A Friend Day
7 – National Wear Red Day
7 – Opera Day
8 – National Potato Lover’s Day
8 – National Molasses Bar Day
8 – Kite Flying Day
9 – National Pizza Day
9 – National Bagels & Lox Day
10 – National Cream Cheese Brownie Day
10 – National Have a Brownie Day
10 – Umbrella Day
11 – National Peppermint Patty Day
11 – Don’t Cry Over Spilled Milk Day
11 – Get Out Your Guitar Day
11 – Make a Friend Day
11 – Satisfied Staying Single Day
12 – National Plum Pudding Day
13 – National Tortellini Day
13 – National Italian Food Day
13 – Madly In Love With Me Day
14 – Valentine’s Day
14 – National Cream-Filled Chocolates Day
14 – International Book Giving Day
15 – National Gumdrop Day
15 – Singles Awareness Day
15 – Hippo Day
16 – National Almond Day
16 – Do A Grouch A Favor Day
16 – World Whale Day
17 – National Cafe Au Lait Day
17 – My Way Day
17 – World Human Spirit Day
17 – Random Acts of Kindness Day
17 – Presidents Day
18 – National Crab-Stuffed Flounder Day
18 – National Drink Wine Day
19 – National Chocolate Mint Day
20 – National Cherry Pie Day
20 – Love Your Pet Day
21 – National Sticky Bun Day
22 – National Cook A Sweet Potato Day
22 – National Margarita Day
22 – Be Humble Day
23 – National Banana Bread Day
23 – Play Tennis Day
24 – National Tortilla Chip Day
25 – National Clam Chowder Day
25 – National Chocolate Covered Peanuts Day
26 – National Pistachio Day
26 – Tell A Fairy Tale Day
27 – National Chili Day
27 – National Kahlua Day
27 – National Strawberry Day
27 – No Brainer Day
27 – Polar Bear Day
28 – National Chocolate Souffle Day
29 – Open That Bottle Night
29 – Leap Year Day
29 – Bachelor’s Day
BY ED SILHAN
So why do restaurants see so much value in drive-to-store advertising? The level at which brands can measure results with the method is a critical motivation to invest in it.
The quick-service restaurant industry has gone through upheaval over recent years as the ways customers engage with brands and how they make purchases have evolved dramatically. Brands have been forced to totally rethink customer experience. Providing in-store tablets and touch-screens to allow for self-serve ordering and implementing digital signage and opening online click-and-collect services are all now quickly becoming de rigueur. Heavyweights like Burger King and McDonalds are leveraging digital-first touchpoints to entice eaters, using branded apps that provide discounted prices, pre-pay, and even mobile check-out.
While the tactics and media plans may be evolving to fit changing consumer behavior and technological advances, the overarching objective remains the same—get customers to the physical stores. Drive-to-Store (DTS) advertising is any form of advertising with the direct intention of increasing foot traffic to physical locations. Sure, brands are indeed intent on leveraging app downloads and third-party online delivery services so that consumers can get their meals at home with just a few clicks, but the bulk of their marketing is still focused on getting people to visit.
As a dominant vertical market with $256 billion in sales in 2018 (according to Statista), there is a lot at stake for quick-service restaurant players to get it right. As reported by IHS Markit this year, nearly $6 billion in advertising by quick-serve marketers invested in 2018 was to attract diners through their doors.
Why drive-to-store advertising is so appetizing for quick-service restaurants
A recent study from IHS Markit found that in 2018, 67 percent of the total amount that U.S. quick-serves invested in advertising was allocated to DTS advertising. On a global scale, the U.S. is one of two countries, along with France, that registered above the industry average for restaurant investments in drive-to-store, with the investment level predicted to rise to 77 percent by 2023.
So why do restaurants see so much value in drive-to-store advertising? The level at which brands can measure results with the method is a critical motivation to invest in it. U.S. retailers value the impact on both visits and sales that DTS can drive for their brands and cite that as a key reason for investing. Furthermore, several marketers have focused on the importance of not only looking at total visits but specifically measuring incremental visits to understand a more precise impact of their advertising. These visits are those that can be directly attributed to their campaigns. If they are unable to isolate their incremental visits, they might be measuring and paying for footfall caused by organic or other channels of advertising.
The most effective way to drive incremental visits
In the U.S., marketers expressed a clear preference for digital channels over traditional ones such as print and OOH for their DTS campaigns. This is due to the capability that digital has to measure overall visits and incremental visits. Mobile performs strongly with 60 percent of marketers considering it the most effective channel for DTS. Mobile will maintain its lead of the U.S. DTS market, with social closely following, growing its share as the key method from 22 percent in 2018 to 28 percent by 2023, according to IHS Markit.
Leveraging mobile for drive-to-store campaigns is an increasingly key strategy for driving incremental in-store visit. An international sandwich franchise launched a mobile-to-store campaign in order to increase footfall uplift to their locations in France recently. The innovative campaign drove measurable results on behalf of the brand including uplift in visits and sales.
In addition, the increased reach and improvements in the quality of customer data and insights that DTS provides are important motivators. Marketers have started to move away from vanity metrics like frequency, impressions, and click-through rates to measurable KPIs that help to meet their business objectives such as increased revenue. So, while quick-service restaurant brands may be ramping up on the growing array of digital branding and performance tactics, their priority remains driving consumers into their restaurants.
As Chief Revenue Officer, North America at S4M, Ed Silhan is responsible for leading the strategic increase in revenue and sales for the entire region. With nearly 20 years of experience in the digital and advertising space, Ed is an executive leader with a history of driving growth in mobile advertising, data monetization and cross channel digital media. Prior to S4M, Ed held sales leadership positions at PayPal, eBay, Meredith, and Remedy Health Media. Most recently, he served as EVP, Head of Sales at SITO Mobile where he led their substantial increase in revenue as well as the development of their presence in the marketing technology industry.
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