McD TV Readies for Prime Time Debut

Discussion
Oct 18, 2011
George Anderson

In recent years, RetailWire has reported on in-store television networks from Best Buy, Dollar General, Target, Walmart and others. In general, the response to the value of these networks has been lukewarm, with BrainTrust panelists and others pointing to the difficulty in measuring effectiveness from either a brand advertising or product movement standpoint.

Now comes word from the Los Angeles Times that McDonald’s is launching its own network in high definition at restaurants across the country. Programming from BBC America, KABC-TV Eyewitness News and reality television guru Mark Burnett will debut as the fast feeder rolls out the network to 800 locations in Southern and Central California. The plan is to tailor content to audiences based on location.

Commercials will take up eight minutes of every hour with six-and-a-half minutes for brands other than McDonald’s.

In the past, McDonald’s sought to move customers in and out of its restaurants, but that has changed in recent years as they have mimicked Starbucks.

"People today are using our restaurants differently than they have in the past," Danya Proud, a spokesperson for McDonald’s USA, told the LA Times. "They’ve become more of a destination. With McDonald’s restaurants offering Wi-Fi, we’ve become more relevant and contemporary."

Discussion Questions: How would you measure success if you were in charge of launching the McDonald’s Channel? Based on your own criteria, do you expect the McDonald’s Channel to succeed?

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15 Comments on "McD TV Readies for Prime Time Debut"


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Ian Percy
Guest
9 years 6 months ago

Just what the family needs…more television. Why not stay home and line up like zombies in front of the TV to eat? Why do we feel that we have to put some kind of bombardment in front of people day in and day out? Eating at McDonald’s is a dubious family event anyway, but going there to watch TV?

Leave our families to actually talk and enjoy each other for goodness sakes…AND GET OUT OF MY FACE!

There, now I feel better.

Gene Hoffman
Guest
Gene Hoffman
9 years 6 months ago

McDonald’s prospers on selling fast food. TV watching slows down customer turnover. Thus, that would be a contradiction of the financial dimension.

Camille P. Schuster, PhD.
Guest
9 years 6 months ago

How are people using the restaurants differently? As a meeting place? As a quiet place to study or read? Does television add value to either of those activities?

How long are people staying? How many of the commercials will they see?

Tailoring the content for the people who are there is tricky — does everyone want to watch the same thing? Does the programming fit the occasion?

It will be interesting to see the results.

Adrian Weidmann
Guest
9 years 6 months ago

I’ve been involved in designing and activating digital media solutions based upon quantifiable metrics and measurable results at retail for more than 14 years and it continually bewilders me that with all the measurable potential and capabilities of digital media the choice is to implement an advertising broadcast television model. This model has been proven time and time again to be short-lived and not sustainable. The only reason that makes any sense is that in the end it’s the easiest to implement — not the most effective, but the easiest and most profitable short-term answer.

This appears to be a solution that was inspired by an advertising agency still doing CPM media valuation math. There are effective and measurable digital media solutions that would truly provide relevancy and personalization to their customers but would certainly be more challenging to implement. The results, in my opinion, would be well worth the effort but would require an executive visionary and champion.

Kevin Graff
Guest
9 years 6 months ago

While I’m not a big fan of this idea, who are we to question the Golden Arches as they’ve posted so many consecutive quarters of same store sales gains? I’m usually pretty quick to question most every initiative (getting cranky as I get older?), but somehow I want to believe that they do know what they are doing (again) with this idea. Will I be watching? No. Will millions of others be watching, and spending more? Likely.

Paula Rosenblum
Guest
9 years 6 months ago

I have a few thoughts on this and even more questions.

Fast food restaurants employ the color orange frequently because it tends to encourage people to leave quickly. (This is true! Remember Ho-Jos?) The operative word is “fast”. So I have no idea why McDonald’s has started to bring in technologies that keep people in the store rather than move them along.

Without the background data, it’s hard to understand the rationale. Still, if you think about CNN in airport departure lounges, it certainly does help pass the time and if the content is interesting enough, people will hang around.

All that being said, I don’t get it.

David Biernbaum
Guest
9 years 6 months ago

I like the thought process McDonald’s has used toward creating its own network and I give this idea a solid B+ for its possibilities. The concern I have is that the notion might tend to conflict with the noise, traffic and realities inside a McDonald’s restaurant. Fact is, McDonald’s is NOT Starbucks.

Doron Levy
Guest
Doron Levy
9 years 6 months ago

For a high volume player like McD’s, you really don’t want customers sitting around watching TV nursing their large fries or McFlurry. Since when is McD’s a local hangout? They built their business on the in and out principal.

Bill Bittner
Guest
Bill Bittner
9 years 6 months ago
I think the key to measuring the success of this program will be the impact on traffic. Using surveillance cameras and image processing software, McD’s can establish baseline and post video installation “hang times”. Because of seasonality issues (who wants to go back out in the cold), it may be necessary to establish a control group. Other changes during the test period besides the installation of the video should be kept to a minimum. A change in drive-up verses inside sales might also indicate people more willing to come inside and relax for a bit. The negative to all this, of course, is that you have certain busy periods during the day when some stores may become too crowded. It might not be a good idea to install video in those locations. (I don’t think turning it off during certain periods would be a good idea.) Finally, by featuring specific promotions for deserts and measuring the impact on desert sales you could get an indication whether anyone is watching. They might also want to try… Read more »
Craig Sundstrom
Guest
9 years 6 months ago

Perhaps this will lure David (Livingston) out of the parking lot and into the store? Seriously though, as the customer seemingly has no control or even knowledge of what’s going to be on, I don’t see the point of this (other than as ambient entertainment).

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
9 years 6 months ago

I’d base success on the decibel reduction of shrieking children’s voices along with the accompaniment of their mothers’ scolding screams. TV mesmerizes children, who already watch way too much of it at home. Depending on the programming — which I’m sure Mickey D will make very attractive to kids — the McDonald’s Channel should significantly reduce activity in their play areas. Why exercise when you can watch TV? It’ll be a sports bar for children. “Hey, Mom, how about another round?”

Kai Clarke
Guest
9 years 6 months ago

Destination, destination, destination. Anything which can help McD’s become a better destination only improves their bottom line and this would certainly keep customers in the QSR longer, as they were moved to purchase more products, especially if McD’s offered specials every hour to people who are watching the TV and use a code or ask for a special product at a specific time mentioned in the in-store ad.

David Slavick
Guest
David Slavick
9 years 6 months ago

The content providers would be funding the exposure. The development/production should be built at little risk to McDonald’s — a neutral at best expense model to be deemed successful. The general model is a fast food environment with quick turns of tables.

I love the new coffee service offered — good quality and attacking share of wallet from Starbucks, Gloria Jeans, Seattle’s Best and others. But it is not and will not transform the store to the casual, cool, hip attraction of a Starbucks. Exclusive music, healthier food choices and low penetration of kids makes Starbucks the preferred choice for the brand advocate, plus social interaction. This is a long standing battle for sure; no real winner will result for several years. I do love the look/feel of the newly designed McDonald’s — its not a greasy burger place any longer.

Dave Haynes
Guest
Dave Haynes
9 years 6 months ago

This is just an extension of a small regional test I’ve been reliably told does not have head office sign-off, and if you read the press coverage you will sense no endorsement from the real decision-makers.

As is noted in the comments, this is a low to no risk thing for the regional restaurant that will live or die based on whether the entrepreneur putting the network in can generate enough advertising sales to cover the capital and operating costs.

The ad sales pitch will be that the channel is getting brand advertising in front of busy parents who watch less and less conventional TV, and that rolled up into hundreds of restaurants, this is a channel that equates to a specialty TV channel and could therefore be “bought” by media planners out of TV budgets.

The jury is still, definitely, out on this ad model, but is hardly unique. There is a Dallas-based network called Indoor Direct that is in a few QSR chains with this model.

Matt Schmitt
Guest
9 years 6 months ago

We have seen many projects like this launch from a “bottom up” strategy, deploying with groups of franchisees in an effort to create traction. I would definitely agree that any initiative with a chance at scaled success needs to have a “top down” sanctioned program from the corporation.

On the issue of whether the advertising model can work for sustaining these networks, there’s no question that value exists to brands wanting to reach the audience in these venues. The real key seems to be that the venue (McDonald’s corporate and franchisees) need to have skin in the game and vested interest in success.

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