Restaurant advertising terminology demystified
When done correctly, advertising can be one of the most powerful forces in the world. It can make you want to do something or go somewhere you’d never previously considered. And you may never realize that you’re responding to advertising.
However, poorly executed ads can have the opposite effect, having a dramatic impact on both immediate and long-term sales. We know your primary focus is the food and hospitality you serve, so we’ve demystified some of the more important and complex concepts you’ll need to build a restaurant advertising framework.
Ad channels explained
There’s no such thing as the right type of restaurant advertising. The best approach will be whatever works for your business at that particular time for attracting the attention of your audience.
Be warned, digital advertising can become very acronym-heavy, but the core areas aren’t complicated to understand.
Search Engine Marketing is using PPC (pay-per-click) bids for keywords your customers may be using to drive website traffic.
Target audiences where they spend the majority of their time online through one of the many popular social media networks.
Push your brand through editorial features such as guest blogs or advertorials in magazine websites.
(Sometimes known as banner ads or programmatic display) Reach audiences everywhere from mobile games to videos.
Pay commissions to a third party based on the number of leads driven to your site.
Reach guest inboxes using your own database or buy access to new audiences through third party email database vendors.
This is a far from exhaustive list, and many other tactics could be considered as part of your restaurant advertising strategy, including Search Engine Optimization (SEO, getting your website on the first page of Google search results) and public relations (PR, using the media to your advantage). However, you’re far less likely to be able to see directly attributable revenue from those areas. For that reason, SEO and PR are usually considered to be part of broader marketing and branding efforts rather than pure advertising channels.
First and last interactions
In the digital age, there’s little excuse for not knowing exactly where every single one of your customers have come from. But that doesn’t make it any easier to attribute which piece of advertising was responsible for revenue.
Your customers may have had many touch points with your brand, from seeing a social post or an ad to the moment they view their bill at your restaurant. They may have clicked on a social media ad, signed up for an email newsletter, and seen some display advertising before finally making an online reservation. Where do you apply the revenue?
Again, there’s no correct answer. This is best determined on a campaign level, and the more short-term the activity, the more likely it is that the last way you communicated with your customer was the one that ultimately led them to dine with you.
How to get the best results from your restaurant advertising
A focus on three forms of restaurant advertising that reach the largest number of potential guests.
All the jargon related to advertising can be a bit off-putting. Get familiar with the most commonly used terms before you commit to your restaurant advertising strategy.
The fundamental purpose of most businesses is to make money, and advertising is the part where you need to speculate to accumulate. For every dollar you put into advertising, you should expect to see money back. Otherwise you would be better off just leaving that money in the bank.
Return on Investment (ROI) and the slightly differently calculated Return on Advertising Spend (ROAS) are calculations that help you to see where spend has been worthwhile.
Revenue from activity, divided by cost of that activity multiplied by 100.
Factoring in the other business expenses that make up the cost of sales.
Revenue / Cost = ROAS
Imagine you’ve just spent $100 for online ads, and generated bookings that delivered $500 in revenue. If (500/100) x 100 = 500, your ROAS is 500%.
Net Income / Cost of Investment = ROI
In order to produce those ads you may have had to pay a copywriter and a designer, plus anyone else involved in getting them live, so your $100 spend was actually $225. Then there are the costs of providing the meals and any other attributable costs such as sales tax, meaning your bookings only really delivered $350 in real revenue. If (350/225) x 100 = 155, your ROI is 155%.
So ROAS is good for knowing whether your tactical short-term efforts are proving worthwhile, and ROI shows whether your approach is sustainable in the long term. Both are valuable metrics and should be used together as you grow your business.
Keep in mind, what works for one campaign may not work for another. A social media push promoting your new menu may have worked wonders, but just replicating the same approach when it comes to promoting a special seasonal offer later in the year may not be as fruitful.
Every campaign needs to be judged on its own merits, with the appropriate channel and level of investment required to be a success.
“51 percent of Rewards Network restaurants reported that social media was their most successful marketing tactic, however 51 percent also said they have not used any digital paid advertising.”Paid Online Advertising for Restaurants »
Rewards Network® does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.