McDonald’s Corp is testing ads from other brands on its restaurants’ digital menu boards as a way to monetise its massive footprint.
The ads display after customers place their orders, taking advantage of the seconds or minutes while they wait for their burgers and fries. With more than 13,700 restaurants across the US, selling ads could create a new revenue stream for the company.
McDonald’s has previously said it serves about 26 million Americans each day, and that it reaches nearly 90% of the country’s population every year.
"This limited menu board advertising pilot at select company-owned restaurants is exploring ways to share post-purchase content that customers may find helpful, relevant, or interesting, while ensuring the McDonald’s experience remains at the centre of every visit,” a McDonald’s spokesperson said in an email.
The test comes as McDonald’s faces rising costs and weaker traffic in the US, with comparable sales last quarter rising at the slowest pace in more than a year. In response, McDonald’s is seeking to sharpen its value offers. The company also unveiled a plan to refresh its restaurants as well as improve food quality and customer service.
About a decade ago, McDonald’s started outfitting US restaurants, most of which are run by independent operators, with upgrades such as digital menu boards in a modernisation push. By 2019, the company had installed the screens in more than 11,000 US drive-thrus. Many locations also have the digital boards inside the restaurants and touch-screen kiosks that customers use to place orders.
Grocery stores have spent years building advertising businesses, selling ad space in stores and online while using customer data to target and measure those ads. Executives surveyed by consulting firm McKinsey & Co said the model, known as retail media, accounts for three per cent to 10% of grocers’ total profit.
Quick-service chains lag retailers in turning their data and customer interactions into advertising businesses, according to a study by Forrester Consulting.
Chicago-based McDonald’s is scheduled to hold its first investor day in three years on Sept 23. Shareholders are looking for details on how the company plans to revive US growth. – Bloomberg
