Advertising share of voice and creative quality exert a more consistent impact on sales than promotions for quick service restaurant (QSR) chains, according to a study in the Journal of Advertising Research (JAR).
Harlan E. Spotts (Western New England University), Marc G. Weinberger (University of Massachusetts Amherst and University of Georgia) and Michelle F. Weinberger (Northwestern University) wrote the study.
And their work drew on four datasets from different research providers in order to “understand the relationship between advertising-executional quality, media spending, sales promotions and changes in sales revenues” for nine QSR brands.
“The heavy use of advertising across media and sales promotions by QSR brands creates an ideal forum for understanding the relationship between these variables and sales,” they wrote in a paper entitled, Advertising and promotional effects on consumer service firm sales: Media ad spend and quality matter for driving restaurant sales.
Their dataset – spanning five years – covered total sales per month, traditional and digital adspend, customer-reported promotion usage, and an index of ad-execution quality.
As control variables, the study used each brand’s advertising share per month, plus macroeconomic factors and wider trends that could influence QSR performance, like same-store sales, traffic, labour costs and capital investment.
One research finding: “Because of differences in the characteristics and consumption of QSRs, the impact of marketing communications on sales is different from other types of companies, particularly consumer packaged goods.”
Another insight related to the importance of expenditure levels: “Advertising-media spending mattered most for changes in sales performance, regardless of advertising-execution quality for the category overall,” the study said.
“For the category leader, however, advertising-execution quality was more important, although its … performance in general was still relatively average. This also may signal that advertising spending for the market leader reached a saturation point,” the scholars added.
Examining the impact of advertising share and creative quality, the study reflected a growing body of work that points to the significance of these two factors.
“In general, advertising share of voice and executional quality were higher for the group of brands with net sales gains than those brands with a net sales loss,” it said.
Sales promotion, by contrast, “was not a significant driver of sales change, and in some cases, particularly for menu-based promotion, it was related negatively.
“Losers relied more on sales-promotion activity over the five-year period, leaning on menu-based promotions more in periods of declining sales.”
Sourced from Journal of Advertising Research; additional content by WARC staff