Marketing for restaurants is becoming increasingly complex and multi-faceted.
What was once done by word of mouth or a via coverage in a local publication or circular has now morphed into mastering a myriad of marketing options that are imperative to the longevity of your concept. Restaurants are vying for face-time with customers who have an abundance of options and are engaging with new and different mediums to make their decisions.
Now more than ever, restaurateurs need to hunker down and set aside funds and plans for their 2019 restaurant marketing budget.
In this post, we aim to help you understand where and why to invest your restaurant marketing budget by outlining the more popular restaurant marketing channels, their audiences, and how much you can anticipate to spend to find success.
How Much Do Restaurants Spend on Marketing?
Did you know that 87% of successful restaurants pay for advertising? Depending on your restaurant's marketing goals, any one restaurant marketing activity can be done for free or require hundreds of thousands of dollars.
Sadly, there's no one-size-fits-all approach to restaurant marketing. The variety of marketing channels restaurants use to get the word out about their business, including:
- Social Media
- Google Search & Adwords
- Traditional Print Advertising
- Video Advertising (Television & Youtube)
- Radio Advertising
- Event Sponsorship
- Charitable Donations or Sponsorship
According to Toast's 2018 Restaurant Success Report, the three most popular marketing channels used by restaurants who saw year-over-year profit growth are social media advertising, charity/event sponsorship, and newspaper/magazine advertising.
You will quickly find that one channel, or channels, may be the sweet-spot for your restaurant, while another that works especially well for your friend's concept is a dud for you. Finding the best restaurant marketing strategy that works for you, your business, and your target customers will take time, patience, and constant testing.
To keep your marketing efforts organized and to track your budget, campaigns, and overall progress overtime, we recommend downloading Toast's Restaurant Marketing Plan and customizable templates.
Restaurant Marketing Budget Breakdown
As previously stated, there's no one-size-fits-all approach to restaurant marketing or restaurant marketing budgets, so it's nearly impossible to project how much you should consider spending on individual marketing channels.
Using Toast's free, customizable Restaurant Budget Template, set aside a sum to cover marketing without worrying about how it may affect other areas of the business. As you conduct marketing campaigns across your chosen restaurant marketing channels, test and see what impact increasing or decreasing the spend has on your campaign's yield. In the world of marketing spend, little changes can have drastic results.
Now, let's break down the different line items you should consider adding to your restaurant marketing budget, why they're important, and how much you can expect to spend.
1) Social Media Budget
76% of internet-using Americans are on social media.
This channel has become critical for restaurants to manage reviews, push out daily specials, and even act as their de-facto website. At a high level, social media can be broken down into organic (or free) posting and paid posting.
Organic posting is great to build a following cheaply and slowly build a brand over time. Sometimes, though, slowly isn’t going to cut it and you need to reach a larger audience now. This is what boosting or creating ads out of organic social media posts is for.
Boosting Facebook posts is when you take an existing post and put money behind it to reach a wider audience. You'll be prompted to select an audience and budget range before spending any money.
There are a variety of factors that enable a broader use of various social channels when boosting and setting budget, such as:
Audience Size and Reach
Needless to say, a bigger audience results in a bigger budget.
However, the point is to scale your ad spend to the point of maximum total utility. In other words: if your budget allows it, spend as much as it takes to make the ROI as low as it can be.
Perhaps one ad is enough if you have a big, one-time event you’re promoting, but if you need to post frequently since you just opened a new location, this can cost you even more. Identify when is the most underutilized time or part of your business and push out that message accordingly.
Again – needless to say here, but more frequent ads will result in higher costs but ideally more return.
Imagery and Content
You can post content on all social channels that you use an iPhone to create or pay tens or even hundreds of thousands of dollars to have a professional photoshoot. Higher quality content will elevate your brand and drive more engagement that will turn into more people coming in your door.
Handling all of the above carefully means you can spend your money wisely and more effectively, thus controlling your budget and limiting wasteful ad spend in your restaurant marketing budget.
2) Google & Search Engine Ads
Google alone sees 3.5 billion searches a day. Having ads at the top of a search result can be a great way to get your name in front of “ready to buy” customers.
Largely, there are two areas to focus on to set you up for success and gauge your spending levels:
- Specificity of the keyword
- Frequency with which the keyword is searched
The challenge is that everytime someone clicks on your ad you will be charged so it's important to focus on searches that you believe have the highest intent to end up coming into your restaurant.
Which keywords should I go after?
Targeting a keyword like “best places to hold a holiday party in Austin” may seem like a good idea, but what if people don’t want to have their holiday party at a restaurant, but rather are looking to do a more activity-based outing?
Going more narrow to target “best restaurants to hold a holiday party in Austin” would give a better result.
While that keyword would target the right person, you may find that only a handful of people search this a month, and so it won’t give you a ton of return. You could broaden the term (i.e. "best restaurants in Austin"), but even better would be identifying as many terms as possible to bid on at the same time. That way, over the course of a month or year, the volume is meaningful.
The image below for a web design company shows what your Google AdWords dashboard will look like. You can set your restaurant's budget and choose which terms to target. You can target multiple keywords and Google will tell you which ones are likely to rank to your audience.
3) Community Events & Sponsorships
Giving back to the community and sponsoring events can be a great marketing tactic because restaurants, like the community, are highly local.
A local music festival could be seen as a place to unwind, kick-back, and be with friends. By sponsoring this consumers will see your restaurant in the same way.
Program spend here can seem hard to measure when compared to other marketing tactics. After all, your restaurant can give $10 to a local charity or your restaurant enterprise can partner to raise $10 million for a nation-wide charity.
Sponsorship budget can also be totally variable. For example, Chipotle is a frequent engager in give back nights, where local groups partner with the restaurant to increase sales in exchange for a cut of the revenue. The flyer below shows that Chipotle will give 50% of proceeds from sales directly attributed to the event back to the fundraisers. In this situation, the budget is totally dependent on how many people go to Chipotle and bring the flyer. Either way, Chipotle sees more sales and the group raises funds.
No matter what your budget, your marketing activity in this area should be dedicated to achieving an audience reach and securing engagement.
Each sponsorship should be associated with a reach like the number of attendees of a game or festival.
Similar to spend on other channels you should ask yourself how much this reach permeates your total target audience. For example, if a festival has 2,000 attendees in a town of 50,000 people you would have messaged 4% of your audience. Even further, it is important to note that sponsorship often extends beyond just the event itself and includes all the promotion and marketing it will do for itself that you may be associated with (e.g. PR).
Engagement is oftentimes higher if you align your restaurant with an event lining up with your concept.
For example, a paid social ad may address a 50,000 person town at a low cost, but if the festival you sponsor is full of avid foodies, they are more likely to engage with your sponsorship than other channels.
Lastly, and hardest to measure, is the brand value of being associated with sponsorship.
For long established companies sponsorship many not give you any more brand value, but for newer restaurants or restaurants expanding into new markets, being a sponsor can give people motivation for taking action in a much deeper way than any one ad can.
As a marketer myself, the rise of video marketing has been one of the most staggering things to watch. In 2017 it is estimated 74% of all internet traffic was video-based. In addition, video content generates 1200% more shares than text and image based content.
Unlike a lot of the other items on this list, video is both a medium of production as well as a distribution channel. Costs associated with both are unique.
Video production can range from using a smartphone to capture quick and authentic content to larger stories that have many layers of cost.
Larger video production can include: storyboarding, graphics, actors, camera and equipment, editing crew, props, and much more. This can quickly add up in cost to the thousands (or more). While this isn’t a hard and fast rule, there is usually a strong correlation between amount of dollars spent on reach and disruption with amount of spend on production.
The two most frequent ways to promote your video are on social media (namely Facebook and YouTube) or through TV ad spots.
For social, one simply puts a budget against a video you hope to boost on your social channels or look into YouTube ads.
Television can be tricky, because most television options have a broad and diverse audience it can be hard for restaurants to see the value of television ads. While larger groups can certainly get value out of these efforts, single location restaurants should focus on hyper local television channels or using their video content to be a pre-amble ad on localized video formats like a movie theater or a welcome video at a local tourist office.
5) Print Ads & Direct Mail
Direct mail ads can be particularly helpful for restaurants as they are hyperlocal.
Most frequently, restaurants send out or drop off menus to residential areas with a propensity to go out to eat, but it can also be used to promote a one off event or update to your restaurant. Cost is largely the result of designing, printing, and distribution.
Design & Print
The design is a one time cost, but printing companies can charge anywhere from cents to dollars to tens of dollars for any one asset. Given that the response rate for direct mail is on average 4.4% the cost at ten dollars an asset can quickly outweigh the benefit.
With distribution there are two options: drop off or list buying.
For larger companies you may want to buy a list of names of people with certain criteria that you deem important like proximity to your restaurant, age group, sex, and more. These can help you target the right audience and improve your response rate. Then you will have to pay for any and all postage.
Many single location restaurants will find this option may take too much time and may not be worth it given the cost. Instead, simply or condo buildings will maximize your return.
Building Your Restaurant Marketing Budget
As a marketer, I have to remind myself that it all comes down to having the right message, targeted to the right audience, sent at the right time.
While that may seem obvious, it's important to think about all of these elements when selecting which type of marketing will be most helpful for you and how to maximize its impact on your behalf. The above outlined a variety of options, and with this free restaurant marketing plan template, you will be able to manage and spend your restaurant marketing dollars wisely.