Restaurant mroi

Optimizing
Marketing and
Media Strategy for
Retail Food Service
Through Effective
Marketing
Measurement and
Accountability
1

Today’s Agenda
• Bottom-Line Analytics
• The Marketing Measurement Challenge
• The Vision
• QSR Case Study
• The Plan
2
Copyright Bottom Line Analytics, LLC - All Rights Reserved, 2013

About Us
 Bottom-Line Analytics LLC is a consulting group that
focuses on Marketing and Social Media analytics
 Our modeling experts have a total of over 100 years of direct
experience with marketing optimization modeling. This
includes direct experience in over 35 countries and dozens of
product categories
 We are dedicated to the principles of innovation, excellence
and uncompromising customer service
 Most important, however, we are dedicated to getting tangible
and positive business results for our clients
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Our Team’s Experience
4

Today’s Agenda
• The Vision
• QSR Case Study
• The Plan
5

The Marketing Measurement Challenge
• In the early 1900’s JohnWanamaker turned a phrase
marketers still reference today:
“Half the money I spend on advertising is wasted, I just don’t
know which half”
• In the 1930’s, Albert Einstein said
“Insanity is doing the same thing over and over again and
expecting different results”
• In the 1990’s a new era of marketing accountabilitywas
born, with an appropriate quote, by F. John Reh
“You can not manage what you don't measure”
6

BLA Focuses on Measuring & Optimizing
The Where And The What
Revenues
Offline Media,
Direct, Creative
& Message
Online Media,
Direct &
Message
Pricing,
Capacity &
Customer
Transactions
Macro
Variables and
Market Factors
Competition
Social Media
Influential Factors – Independent Variables
7

Today’s Agenda
• The Vision
• QSR Case Study
• The Plan
8

9
• Visualize-
The Vision
– A tool which will enable you to accurately ascribe ROI to each of your various
marketing initiatives
– The ability to simulate and forecast any of a number of future Business Plans
and/or Business Scenarios
– An ability to know what marketing programs are working and not working
– The ability to accurately quantify volume gains from specific competitors, due
to cannibalization or that which is purely incremental
• Realize
– How to drive 3-10% more revenue with current or existing marketing budgets
through model-based marketing spending optimization
– A business and marketing plan that can be factually defended and linked
directly to profitable revenue and growth
– A business plan where you are confident that your marketing dollars are
working at maximum efficiency
– A system whereby wasted and unproductive marketing initiatives can be
eliminated

Today’s Agenda
• The Vision
• QSR Case Study
• The Plan
10

11
QSR Restaurant Case Study
• Client Profile - $6.3B annual revenues, 1,800 outlets nationwide, 100%
franchise-owned
– Franchisees fund national-corporate marketing and product development via a
10% assessment against their net income and fund 100% of local marketing
efforts
– Client spent $85M in marketing & media initiatives:
• National Media: $46M
• Local Media $39M
• New Product Launches & Initiatives: $4M
– The client used a broad spectrum of different messages supported across
media, including brand, breakfast, promotional & new products
• Study Objectives
– Develop a fact-based assessment of Media and Marketing activities
– Develop recommendations to maximize growth by achieving the most
effective balance between national-corporate, local and new product
marketing investments and across all regions, media and marketing channels
• The case example has been masked to preserve confidentiality

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Client Questions
How Effective Are Our Media and Marketing Activities?
1. What proportion of marketing program/channels contributed to total
revenue sales?
2. Which regions were most impacted by marketing and which marketing
programs worked best in each region?
3. What were the key drivers of growth and what role did new-products play
in driving that growth?
4. What messages drove a greater response - brand, new product, breakfast
or promotional?
5. What is the ROI of individual marketing programs/channels?
What Can We Do To Improve In The Future?
6. Which marketing activities represent the best opportunities for
increased funding and which should we cut back?
7. What is the optimal total spend and how should that be allocated across
markets and programs/channels?
8. What Is the optimal marketing spend across individual markets?

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1. What Proportion Do Marketing Programs/Channels
Contribute To Annual Sales?
 Marketing efforts drove 19% of QSR sales. National TV drove 6.4%, local TV generated 5.9% of sales.
Breakfast messages generated 4.9% of total sales, while new-product media messages garnered a 2%
share; social media drove 8.8% of sales.
65.6%
Decomposition of Sales
3.7%
0.8%
8.8% 1.1%
0.8% 1.9%
2.2%
3.6%
0.4%
2.6%
00..58%% 0.3%
1.8%
4.1%
00..37%%
19.1%
Marketing
Activities
Base Vol Customer Traffic Growth Store Expansion
Social Media WOM Healthy Menu Launch Media New Salad Buffet Media and Promo
FSI's Ad Quality Local Radio
Local OOH Long Term TV Ad Effect Nat Brand TV Short-Term Effect. Brand Message
Nat Brand TV Short-Term Effect. Breakfast Message Nat Brand TV Short-Term Effect. Promo Message Local TV Short-Term Effect, Promo Message
Local TV Short-Term Effect, Breakfast Message Online Banners Online Search

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2. Which RegionsWere Most Impacted By Marketing And
Consolidated Sales Decomposition by Region
WhichMarketing ProgramsWorked Best In Each Region?
 The West Region is the most marketing driven of all of the regions. This is due to the higher success of
new product launches . The SE region is most affected by local TV advertising, whereas FSI’s have a
relatively greater impact in the NE region.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Decomposition of Sales by Region
Northeast Central Southeast SouthWest West
Online Search Online Banners Local TV Short-Term Effect
Nat Brand TV Short-Term Effect Long Term TV Ad Effect Local OOH
Local Radio Ad Quality FSI's
New Salad Buffet Media and Proomo Healthy Menu Launch Store Expansion
Customer Traffic Growth Base Vol

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3. What Are The Key Drivers Of Growth? What Role Did New-
Products Play In Driving That Growth?
 The QSR sales increased 6.7% YOY. The two new item launches together accounted for 3.2 points of that
growth, or nearly half. Improved national TV ad quality was a notable positive driver
 Negative effects were due to a +3% price increase and reductions in outdoor and local TV ad spending
Contributions to Annual Sales Variance
3.2
-3.2
-3% -2% -1% 0% 1% 2% 3% 4%
Healthy Menu Launch Base Vol Ad Quality Local Radio
Store Expansion FSI's Customer Traffic Long Term TV Ad Effect
New Salad Buffet Media and Promo Online Adv National TV Short-Term Effect Local TV Short-Term Effect
Local OOH Price

4. What Messages Drove A Greater Response, Brand, New
Product, Breakfast Or Promotional?
 New product and breakfast messages stand out as delivering the highest ROI per dollar of
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$-
Brand Messages Breakfast Messages New Product
Messages
Promotional
Messages
$1.11
$1.49
$2.68
$1.26
ROI of Marketing Campaigns & Messages
(Profit Per Expenditure $)
investment.
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5. What Is The ROI Of IndividualMarketing Programs/Channels?
 The QSR generates a 29% ROI on $85.1MM of Marketing spend
 Across the mix, all activities generate positive returns except outdoor advertising and FSI’s. The
launch of the healthy menu line was most profitable, with above average ROI for Salad Buffet
marketing, national TV, local radio and online advertising.
Marketing ROI
Gross
Profit
Spend
(Cost)
Net
Returns % ROI
New Salad Buffet Media and Promotion $ 6.6 $ 3.6 $ 2.9 45%
FSI's $ 14.3 $ 16.4 $ (2.1) -15%
Healthy Menu Launch $ 4.8 $ 0.4 $ 4.4 92%
Local TV $ 15.9 $ 12.1 $ 3.7 24%
National TV $ 57.2 $ 39.2 $ 18.0 31%
Local Radio $ 15.5 $ 8.7 $ 6.7 44%
Local Outdoor $ 1.7 $ 2.0 $ (0.3) -17%
Online Advertising $ 4.4 $ 2.3 $ 2.0 46%
Total Local Spending $ 47.5 $ 39.4 $ 8.1 17%
Total National Spending $ 73.1 $ 45.6 $ 27.4 38%
Total Spend $ 120.6 $ 85.0 $ 35.5 29%

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6. WhichMarketing Activities Represent The Best Opportunities
For Increased Funding? Which Should Be Cut Back?
 Below shows the relative attractiveness of the QSR’s marketing investments and campaigns. Online
media represents the best upside opportunity, while FSIs and Local OOH should be reduced
Increase/Maintain Spending
Diminishing
Returns-Reduce
Increase
Significantly
Significantly
Decrease
Marketing Investment ROI Matrix

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7. What Is The Optimal Total Spend And How Should That Be
Allocated Across Programs/Channels?
 The QSR can optimize sales by decreasing FSI’s, National & Local Promotional TV and Online
Banners, while keeping total spending constant
 Increase spending on the Healthy Menu initiative, Local & National Breakfast TV, Radio and
Online Search. This solution is expected to generate an 8% increase in overall sales
100%
80%
60%
40%
20%
0%
Marketing Spending Optimization by Channel
Current Mktg Contrbution Current Spend Optimal Spend
Online Search Online Banners
Local TV Short-Term Effect, Breakfast Message Local TV Short-Term Effect, Promo Message
Local TV Breakfast Message Local TV Promo Message
National TV Promo Message National TV Branded Message
National TV Breakfast Message Local OOH
Local Radio FSI's
New Salad Buffet Media and Proomo Healthy Menu Launch

8. What Is The Optimal Total Spend And How Should That Be
Allocated AcrossMarkets?
 The greatest upside opportunity is to increase relative marketing investments in the Southeast and
Marketing Spending Optimization by Region
West Regions
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Current Mktg Contribution Current Spend Optimal Spend
West SouthWest Southeast Central Northeast
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0
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Model Actual
Overall R^2 = 96.7%, Holdout R^2 = 94.0% ,MPE=+/- 2.4%
Model Validation
Sales
$Mil
One year after this project, due to significant increases in breakfast media and new-product
investments, this QSR increased same-store sales 11% and net income 17%
 Our models do a good job of predicting sales

Today’s Agenda
• The Vision
• QSR Case Study
• The Plan
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23
The Plan
• Developing the analytics and measurement tools
• Building measurement and accountability into
business plans
• Measuring and monetizing the customer experience
with social media measurement
• Developing a measurement and accountability
culture
• Entering and realizing the path to superior profits
and growth

Contact
• Michael Wolfe
– Principal - Bottom-Line Analytics LLC
– mjw@bottomlineanalytics.com
– (o) 770.485.0270
– (C) 678.314.8446
• DavidWeinberger
– Chief Marketing Officer - Bottom-Line Analytics LLC
– David@bottomlineanalytics.com
– (O) 770.649.0472
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