Today, the quick-service restaurant industry finds itself at an inflection point. Amidst increasing economic pressures and rising inflation, QSRs have been hit harder than a lot of the market, with restaurants raising their prices by 60% on average over the last decade. Dubbed “fast-flation,” QSRs have been left trying to juggle the rising costs of goods and labor with fulfilling the promise of what consumers have always relied on them for: budget-friendly food options that don’t break the bank.
Still, as a result of steady increases on menu prices, customers have started to pull back. Major restaurant chains are feeling the effects as the cost of eating out at quick-service restaurants swiftly outpaces that of eating at home. And, in the age of social media, customers have been quick to flock to the likes of TikTok to air their grievances over rising menu prices — only contributing to a more rapid widespread dissatisfaction with some QSR brands.
All of this has made the case for today’s QSRs to get creative in finding new, effective strategies to win customers back and fight for a bigger share of a declining market, whether it’s offering special coupons or boosting loyalty programs. Marketing, especially, plays a critical role here in helping QSRs to reconnect with customers and build their brand loyalty.
As the biggest screen in the home that offers a non-skippable environment, Connected TV (CTV), specifically, is proving to be a key marketing channel for QSRs to reach new customers and re-engage existing ones. This year, CTV ad spend is on track to surpass $30 billion, reaching more than $42 billion by 2027 as viewers continue to flock to streaming from the traditional linear experience. And QSRs are already well-positioned for the medium: According to a November 2022 report, 92% of ad-supported CTV viewers visited a QSR in the previous six months from the date the study was conducted.
Even with its promise, however, CTV has yet to realize its full potential in delivering the kinds of personalized and relevant ad experiences that will be required in order for QSRs to win back customers and really move the needle. To get there, QSRs must tap into what consumers are truly craving: emotional connection.
QSRs, like all advertisers, have long understood the power of emotions in building brand loyalty with their customer bases, whether it’s showing touching images of families sitting inside the restaurant and connecting over food, or leveraging a comedic brand mascot to tell people about a new meal deal. Today, however, new technologies like Generative AI (GenAI) are unlocking entirely different ways for brands to target audiences through emotions on CTV.
Traditionally, CTV ads have relied on broad genre-based targeting. But shows and movies are more complex than that — what might be considered an action movie could also be deemed a comedy. Similarly, a show labeled a comedy is likely to also have sentimental scenes that make viewers cry. All of this is to say, genre-based targeting on CTV doesn’t account for the emotional nuance of programming, oftentimes leading to mismatched ad placements that do little to bolster an emotional connection between a brand and a customer.
And the price of emotionally and contextually-misaligned ads is great. A recent survey found 54% of people were less interested in a product when ads were contextually misaligned, while 31% said they liked the brand less overall. Especially in a non-skippable, big-screen environment like CTV, ensuring ads aren’t jarring to the viewer experience is critical.
Today, forward-looking QSRs are starting to rethink their marketing strategies and take advantage of the targeting capabilities GenAI now offers. With the ability to analyze CTV content scene by scene, GenAI can identify the emotions being evoked on screen in real time, thus allowing QSRs to serve highly relevant ads based on viewer sentiment (e.g., a happy ad for comedy or a heartwarming ad for drama). For instance, Dunkin’s latest spot would feel relevant rather than jarring to an audience that’s just been laughing at a particularly funny scene in Abbott Elementary. In fact, companies like PMG are already using emotions-based targeting for their QSR clients’ campaigns, finding that ads that match the emotion of scenes can have a direct positive impact on performance, including incremental in-store visits and sales.
QSR brands today face a unique challenge in aiming to balance rising costs and competition with a superior customer experience. As restaurants look to rebuild their marketing strategies and win customers back, emotions-based targeting on CTV — driven by GenAI — offers a fresh opportunity to boost engagement and ad effectiveness. Ultimately, by aligning the emotion of an ad with the emotion of the content on screen, QSR brands can create stronger and more memorable moments with viewers, leading to increased brand loyalty and sales, and combating customer pullback as they navigate this challenging economic landscape.
AUTHOR BIO
Pete Crofut is Vice President, Business Development – Agencies & Brands at Wurl, which leads the Connected TV industry in helping content publishers and streamers reach millions of viewers worldwide. In his role, Pete oversees Wurl’s agency and brand advertiser partnerships, helping clients grow brand loyalty and reach new audiences on CTV. As Google's former Chief Business Strategist, Google Marketing Platforms, he partnered with the company's largest customers to enable their digital transformations, helping to drive more than $1 billion in incremental revenue on an annual basis. He also served as Director of Partnerships for other major advertising and technology companies prior to Wurl, including InfoTrust and Adswerve. Peter currently resides in Portland, Oregon. In his free time, he likes to spend time traveling, skiing, and golfing with his family.
