3rd Annual Franchise Marketing Report (AFMR), Part 3

Editor: This is the third installment in a series of highlights from the 2021 Annual Franchise Marketing Report (AFMR). Find part 1 here and part 2 here.

2021 marked the release of the third Annual Franchise Marketing Report (AFMR). This report provides franchise consumer marketers with invaluable data and analysis they can use to benchmark their performance against other franchise brands and within their industry sector. In short, the AFMR is a unique resource franchise marketers can use to improve the effectiveness of their marketing efforts and spend.

The ongoing pandemic, on top of franchising’s already competitive and frothy landscape, has strengthened the necessity for marketers to better understand how their brand measures up against the competition, as well as how it is performing in the wider marketplace. The AFMR can help franchise consumer marketers understand how their team compares with their peers and, more importantly, help them direct their limited resources into the most effective channels for achieving their system-wide goals during these uncertain times.

“This annual report was created at the request of our Franchise Marketing Leadership Conference Advisory Board to develop relevant content for CMOs, and to learn more about their needs and challenges,” said Diane Phibbs, executive vice president and chief content officer at Franchise Update Media.

Participants in the AFMR consisted of franchise marketing leaders who completed an in-depth questionnaire. Responses were aggregated and analyzed to produce a detailed look into the marketing practices, budgets, and strategies of a wide cross-section of franchise brands and sectors. The data and accompanying commentary and analysis provide the basis of the 2021 AFMR. Below is the third installment in a series of selected highlights from the new report.

Marketing Budget: Spend & Effectiveness

The new consumer behaviors resulting from the pandemic meant that media options that had worked in the past were no longer as effective as in previous years. So where to spend? With so many people working from home, laid off, or receiving extended unemployment benefits, out-of-home advertising such as billboards and radio ads dropped toward the bottom of marketers’ toolboxes.

Overall, two-thirds of respondents (67%) said budgets are higher this year than last, although budget allocations remained similar to those of 2020, with a couple of exceptions.

Spending on digital marketing increased, again not surprising as consumers spent more time online and were able to view digital marketing efforts more easily. Consequently, online marketing methods such as digital advertising, websites, and social media all performed well over the past year. Digital effectiveness showed a significant jump over last year, as seen in the graphic.

And before the recent spread of the delta variant, marketers had begun increasing their spending again for in-person trade shows. With business people yearning for a return to face-to-face (or at least elbow-to-elbow) reunions, it’s no surprise to see that effectiveness in this area increased too.

Spending on TV and radio dropped a couple of percentage points in the past year. Much of this drop was likely in radio as marketers pulled their dollars when commuters were asked to stay home. “What’s interesting here is that while spending in this category decreased, its effectiveness increased to almost double from 2020,” said Phibbs.

Next time: Digital Marketing Budget: Spend & Effectiveness.