Key Marketing Initiatives for Franchises

By leveraging innovative digital technology, franchisors and franchisees can strike a new balance in marketing.

By Alex Porter, CFE, Location3

Historically, many franchisors have used a large percentage of their franchise ad fund budgets to buy traditional media placements, including ads on television, radio, print advertisements and billboards, to market the brand and business to potential customers. However, these national-level ad buys and the traditional media channels they target have limited those same franchisors in promoting their individual franchisee locations. 

Traditional media channels are great in driving brand awareness, but not necessarily as effective in getting consumers to visit a location or make a purchase due to their broader messaging. Complicating things further, many franchisees often expect a direct return for their own businesses based on their personal ad fund contributions. 

A potential solution to this challenge can be found in recent technological advances in digital marketing that have the potential to positively impact how brands spend their ad fund budgets. These advances can also improve the franchisor-franchisee marketing dynamic while driving incremental marketing investments on the local level from franchisees themselves.

Blurring the Lines Between Digital and Traditional

Most consumers grew up with only traditional media outlets. In the early days of the Digital Age, transitioning from these outlets to modern alternatives was uncomfortable. This was because the traditional and digital experiences were much different. Television and radio were mature technologies that could be relied on, while digital technologies were still evolving and required new skills.

Yet, a couple things have happened since those early days. The first thing being that we improved our digital media skills. As digital tools have become more universal, the public has gained experience and comfort with email, smartphones, online shopping, video streaming and more.

The second is that digital technology started to imitate the traditional media experience. Smart TVs in our homes now seamlessly stream video content and digital signs in high-traffic areas have replaced static billboards. Smartphones have become the all-in-one tool that allow us to read the news in real-time while streaming audio and video nearly everywhere we go. 

As the lines between the traditional and digital experiences blur, brands and marketers must invest in the experience that gives them the most direct line to potential customers in their target audience. When planning for 2020, consider testing the following digital platforms for marketing and advertising:

Digital Marketing Platforms

Digital Alternatives: For every traditional media channel, there is a digital alternative that delivers a high-quality user experience as well as enhanced targeting capabilities for marketers. The traditional route features broadcast or cable television, while the digital alternative is connected TV. 

Television: Connected TV is rapidly expanding as more users quit cable TV in favor of streaming services like Netflix (148 million users), Amazon Prime (89 million users) and many other content providers. Connected TV delivers a similar viewing experience to traditional television with ads running periodically during viewing. The main advantage of Connected TV over traditional TV is the ability to more efficiently target potential customers, including customized calls-to-action, multiple ad formats and the ability to engage users with sequential ad messaging across multiple devices based on IP addresses. In one of our own franchisor case studies, a Connected TV campaign resulted in significant increases in total sales and revenue while spending 76 percent less in advertising dollars compared to traditional TV.

Radio: The traditional channel for streaming music is the radio, but it has quickly been replaced with streaming audio. Streaming platforms like Spotify and Pandora have given users control of the radio, so to speak, allowing them to choose instantly what music and which podcasts they’d like to hear. These platforms have also given advertisers access to audience information, including age, gender, location, activity and even personal taste. The result is an active and growing user base that franchisors can engage with by placing highly targeted, programmatic ad buys that are more efficient and effective than producing a broader spot for local terrestrial radio.

Out of Home: Digital out-of-home (DOOH) advertising is a growing channel ($8 billon spent in 2018) that is reaching more consumers offline, much like traditional billboards. But DOOH goes further, using mobile location data to update dynamic creative in real time. This allows advertisers to add context to messaging, including time of day, weather and traffic conditions. DOOH is often incorporated into an omni-channel strategy that delivers a follow-up ad to potential customers who were exposed to a DOOH ad. 

Balancing Franchisor and Franchisee Marketing for Increased Revenue Growth

In many instances, franchisor and franchisee marketing strategies operate in silos and lack integration. The franchisor is often responsible for big-budget, national media buys that raise brand awareness, while franchisees are generally responsible for executing local marketing campaigns that drive customers into their stores. 

As digital technologies mature, brand strategies and local strategies are becoming indistinguishable. Digital platforms like Connected TV, streaming audio and DOOH are delivering traditional user experiences with modern targeting — mass appeal with local impact. 

As a franchisor, you can use ad fund dollars to leverage these digital channels and promote brand awareness, while customizing ad placements with location-specific calls-to-action in support of your franchisees.

As a franchisee, complimenting this strategic approach by investing your own ad budgets in hyper-local display, paid search and paid social ads can capture that same consumer interest as they seek out specific information about your location, products and services. 

In 2020, testing this strategy may provide the opportunity to create a more efficient cycle of marketing investment between the franchisor and franchisees, driving increased ROI and supporting everyone within the entire franchise system. 

Alex Porter is the CEO of Location3, a digital marketing agency that delivers enterprise-level strategy with local market activation. Find out more information on Location3 here.