2021 Annual Franchise Development Report – 2020 Digital Spend: Budget vs. Effectiveness
With spring in the air and Covid vaccines in more bodies, it’s time to move from recovery to growth. That’s why we’ve started this series of highlights from the 2021 Annual Franchise Development Report (AFDR). We began with an overview of the research, analysis, and methodology used in the report. The previous issue covered the budget vs. effectiveness of a brand’s total spend.
The results from the 2021 AFDR were unveiled last October at the first-ever Franchise Leadership & Growth Virtual Conference (FLGVC). New in this year’s report is survey data on the effects of the Covid-19 pandemic and new statistics on the changing role franchise brokers play in the development process. Because of Covid, the AFDR was combined with the Annual Franchise Marketing Report (AFMR) this year.
Participants in the survey consisted of franchisors that completed an in-depth online questionnaire. Responses were aggregated and analyzed to produce a detailed look into the recruitment and development practices, budgets, and strategies of a wide cross-section of franchisors. The data and accompanying commentary and analysis provide the basis of the 2021 AFDR/AFMR.
Highlights from the report were presented in a general session at the conference by Franchise Update Media’s EVP and Chief Content Officer Diane Phibbs and CEO Therese Thilgen. Ordering information is at the end of the article. Conference attendees received a complimentary copy.
Digital Spend: Budget vs. Effectiveness
When Covid hit and travel stopped, traditional lead generation methods were no longer viable. Franchise development teams turned to digital, which is relatively cost-efficient and easy to get into. Still, the shift to digital in all aspects of life created a lot of change that marketers – and consumers – had to figure out as the months dragged on.
Looking at how digital budgets are applied, the survey found that spending for advertising portals was up, but their effectiveness declined during Covid. The opposite was the case for pay-per-click, where spending was reduced but effectiveness increased.
“This is interesting when you look at last year’s results, where the effectiveness for the two was very similar, but the spend was quite different,” said Phibbs.
The effectiveness of social advertising is similar to last year, but spending in this category increased by almost 10%.
“I believe brands tried a lot of different ways to attract prospects during this time of change,” said Phibbs. “It will be interesting to watch how digital initiatives change in the coming year.”
If there’s one point to stress after analyzing all the data, said Thilgen, it’s to fully understand your target audience.
“So much has changed this past year, and it affects everything we do – values, financial situations, and the way people communicate. It all plays into the franchisee recruitment program, and some do it better than others. We should evaluate our target market and adjust our budgets and lead generation initiatives accordingly.”
Next time: Measuring cost per lead and cost per sale.
As an additional bonus, the AFDR was combined with the Annual Franchise Marketing Report (AFMR) this year. The price for the combined report is $350. As noted, all conference attendees received a complimentary copy. Place orders at https://afdr.afrm.franchiseupdate.com.
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