Restaurants Serve Up Ads in 2009, Plus Top Cities for Growth

Restaurants Serve Up Ads in 2009, Plus Top Cities for Growth

While advertising as a whole took a hit in 2009, the nation’s Quick Service Restaurants ramped up spending during the year by 2% over 2008, according to The Nielsen Company.  Fast food restaurants spent almost $4.1 billion during the year, with nearly 36% being spent on Spot TV, followed by Network and Cable TV.

The sector spent $84.7 million on African-American media during the year, and increase of 18% from the year before, cable TV showed significant growth – up 42% — while network TV dropped more than 70%.

Top 10 Media Types for Quick Service Restaurant Advertising

Media Type Jan-Dec 2009 ($ millions) % of Total Ad Spending
Spot TV 210 DMAs 1,475.5 36%
Network TV 934.8 23%
Cable TV 868.3 21%
Spanish Language Network TV 203.0 5%
Spot Radio 183.2 4%
Outdoor 149.0 4%
National Magazine 84.2 2%
Syndicated TV 80.0 2%
Internet 58.9 1%
Network Radio 18.1 0.4%
Source: The Nielsen Company

On the Wait Service side of dining, ad spend fell 4% in 2009 to $1.56 billion.  More than a quarter of that was spent on Network TV, followed by Spot and Cable TV.  “Local Newspapers” was the fourth largest category, with $124 million being spent, compared to just $14.8 million in that category for quick service restaurants.  For Wait Service Restaurants, all categories – except for cable TV – registered a decline in spending during the year.

Top Cities for Restaurants

Meanwhile, Nielsen Claritas released its annual Restaurant Growth Index (RGI) report, which found that the top city for dining out was Fort Walton Beach, Florida, which scored an RGI of 577, beating Myrtle Beach, South Carolina, which claimed the top spot for the past two years.  Despite leading the pack, Fort Walton Beach’s score was well below Myrtle Beach’s scores for the previous two years (735 and 632) reflecting the economic turmoil in 2009.  The average index score among markets in the top 10 was off 40 points from the previous year.  Nationally, restaurant sales fell more than $5 billion in 2009, which translates to both diminished sales per capita and per restaurant outlet.

Rank Metro Area RGI
1 Fort Walton Beach, FL 577
2 Myrtle Beach, SC 469
3 Ocean City, NJ 411
4 Atlantic City-Hammonton, NJ 330
5 Flagstaff, AZ 329
6 Honolulu, HI 308
7 Las Vegas-Paradise, NV 296
8 Barnstable Town, MA 278
9 Springfield, IL 274
10 Jackson, TN 274
Source: The Nielsen Company

The RGI tends to favor markets with significant number of out-of-town visitors, such as vacation destinations and college towns.  Springfield, Illinois may be the most surprising entrant to the list, but if one considers the fact that it is a state capital with a large number of state employees, legislators and lobbyists need somewhere to eat, its inclusion makes more sense.

“Obviously, the economy has had a significant effect on the restaurant industry as money-conscious consumers cooked dinner and ate at home more frequently.  But there were a number of markets that were bucking the trend with annual sales increases during the year, notably Barnstable Town on Cape Cod, which jumped into the number eight position, and Napa, California, which climbed 20 spots to number twelve after having fallen to 32nd place last year,” said Matt Wolff, AVP, Retail Practice Manager at Nielsen Claritas.

Read the full article from Restaurant Business magazine.