Introduction to Franchise Advertising Challenges

Detroit, MI, 2024— It’s estimated that half of local franchise advertising dollars have been wasted over the past decade. As the world transitioned to digital advertising, local pizza chains, burger stops, and even home services franchisees spent half their ad dollars on print or direct mail—not necessarily because it was more effective, but sometimes because it was easier for a busy franchisee to comply with their franchise agreement by writing a check to companies like Valpak.

Franchise marketing in the digital age presents unique challenges for multi-location advertisers, especially when it comes to allocating local advertising budgets effectively. A critical issue that has emerged is the underutilization of contracted local advertising funds by franchise locations, with a significant portion of these funds still being directed towards traditional print and mail campaigns rather than more effective HyperLocal digital store marketing strategies.

Franchise Marketing Strategy Insights from DBA Worldwide

Franchise marketing agency, DBA Worldwide, reports that many franchise brands are frustrated with the overallocation of local ad spend on outdated strategies, including print and mail, and their clients are perplexed by exactly how to solve the apparent underallocation of required local ad dollars on digital media. Partnering with digital platforms such as AdBox, agencies like DBA expect to help franchise brands increase their accountability for local ad dollars while increasing their local ad spend on the right media channels that create more sales.

The 5th Annual Franchise Marketing Report highlighted the perennial challenge of getting franchisees to invest the appropriate amount of time and resources into local marketing, even though these are often funds that the franchisees have contributed to a marketing fund. This report also sheds light on the struggle with compliance and the difficulty in enforcing local spending mandates and recommendations, underlining the complexity of managing marketing efforts across multiple franchise locations.

“We’ve found it’s important to offer ways to help incentivize and reward use by franchisees, such as a matching funds pool,” stated Daniel Cobb, Founder and President of AdBox.

Digital Marketing Transition and Statistics

Lagging nearly a decade behind consumer usage trends, digital advertising is forecasted to finally dominate local ad spending in 2024. According to DBA Worldwide, major franchise organizations still report more than half of their local budgets are spent on print. Spending in print is less about the effective use of funds, and more about an easy decision or habit. The transition to digital is complex for a busy local store operator, but it is inevitable, especially as second-generation franchisees enter with tech-savvy ambitions. Borrell Associates reports a 7.7% increase in digital formats, while non-digital formats are expected to decrease by 5.9%. This shift underscores the latent but growing correction toward digital channels, with digital advertising estimated at $7 of every $10 spent on local advertising in 2023, up from approximately $5 of every $10 in 2017, but some are still laggards, at 50%.

Franchisor and Franchisee Digital Strategy

Franchisors and franchisees alike face the challenge of navigating digital media shifts and privacy considerations, further complicating the marketing landscape. This environment calls for a strategic marketing mindset that prioritizes agility, testing, and innovation over merely outspending the competition.

Get fully funded for local digital store marketing. Manage and monitor local ad funds, automate sales reporting, royalty calculations, and collection of funds. By integrating matching funds, AdBox incentivizes the transition toward digital marketing. “Our adoption of a centralized platform is high, partly because of the resources we provide, and partly because of the compliance tools that ensure our customers are running the right disclaimers in the right market,” stated Kara Eid, COO and Brand Manager of AdBox.

About AdBox

Emerging as the first of its kind Automated Digital Asset Manager (ADAM), AdBox is revolutionizing the franchise marketing landscape with its AI-powered platform, designed to streamline local digital advertising while ensuring compliance with state-by-state media regulations and customer privacy data laws. Through its all-in-one solution, AdBox enables franchises to create, store, and launch localized ads efficiently, offering dynamic customization and ensuring brand consistency across all locations. With features like automated marketing, real-time reporting, and a digital asset manager, AdBox addresses the unique challenges of localized advertising, making it simpler for franchises to meet localized regulatory requirements and engage their target audience effectively.

About DBA Worldwide

A leader in brand performance marketing for national brands, DBA specializes in multi-location chains, franchise marketing, e-retail, products, healthcare, hospitals, food, and finance with a special expertise in hyperlocal community and purpose-driven brands — including Chick-fil-A, Papa Johns, Disney, Henry Ford Health System, U of M Health, Valley Children's Healthcare, Citizens Bank and Rocket Mortgage. Starting as a franchise marketing agency, Daniel Brian Advertising built a network of agencies to service local franchisees and multi-location brands. DBA Worldwide is the parent brand of that network.

Frequently Asked Questions (FAQ)

Q: Why are traditional advertising methods still prevalent among franchisees?
A: Many franchisees opt for traditional advertising methods such as print and mail because it is often easier to fulfill franchise agreement requirements this way, even if these methods are not the most cost-effective.

Q: What are the benefits of transitioning to digital advertising for franchises?
A: Digital advertising allows for more precise targeting, better tracking of ROI, and typically leads to higher engagement rates. It also enables franchises to better align with current consumer behavior and technological trends.

Q: How does AdBox help franchises with digital advertising?
A: AdBox provides a centralized digital asset management platform that simplifies the creation, storage, and launch of localized ads. It also ensures compliance with media regulations and protects customer privacy, making digital advertising easier and more effective for franchises.

Written By

Daniel Brian Cobb


Date Published

May 21, 2024

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