Franchise Operations

Franchising and Digital Marketing

A new report on digital marketing among franchises has one major conclusion: only a few franchises are actually making good use of the potential that online marketing offers. 296 different franchises representing 28 industries were included in the survey, conducted by FRANdata and G/ODigital, and nearly all respondents were using some form of digital marketing, but the details varied widely from one franchise to another.

Here are some data points that might surprise you:

  • Fewer than half of the companies surveyed had mobile-friendly websites, even though American consumers are now just as likely to visit websites with mobile devices.
  • Only 25% offer mobile promotions to customers.
  • Only 30 percent of franchisors surveyed track their franchisees’ digital marketing ROI.
  • Only 42% have corporate websites where franchisees can host a web page.
  • 63% of those surveyed admitted that a lack of knowledge and access among franchisees is their biggest challenge in digital marketing.

That doesn’t mean that franchise companies don’t use digital marketing. 84% of those surveyed use email marketing — it was the single most popular marketing technique, far surpassing direct mail, TV, radio, and print ads.

It was interesting to see that the franchisor’s executive office didn’t make all the marketing decisions. The franchisor’s marketing department, a franchisee advisory board, or multi-unit franchisees were nearly as likely to make the decision. Counted all together, franchisees were involved in marketing decisions an impressive 87% of the time. At the same time, fewer than half of all franchisees in the survey have full control over their marketing. 30% must get approval for all messaging from the franchisor.

Franchisors reported that 60% of centralized marketing costs are covered by the franchise’s national advertising funds and just 15% by corporate funds. 14% said they would charge additional fees if they decided to implement new centralized marketing efforts.

So franchisees are often seeing a situation in which they pay for digital marketing but do not make the decisions. On the other hand, franchisors have reason to believe that franchisees will not be able to keep up with decisions about digital marketing.

The researchers pointed out the complexity of centralized digital marketing for franchisors, but digital marketing can actually work very much as traditional broadcast marketing does. A national TV or radio ad raises national awareness and can be shown in local markets with the addition of the local franchise’s information. A national brand website may list all their locations, or they may have a store locator visitors can use, while most of the website provides national branding and information all visitors can use.

However, franchisors expressed concern about maintaining a consistent brand message with digital marketing. They also worried about training franchisees. These concerns suggest that franchisors were thinking less about establishing centralized digital marketing plans and more about allowing franchisees to use social media, website updates, or local email and text marketing.

Either way, one of the things franchisors in the survey really agreed on was that ROI is key. While website traffic was the top way those surveyed tracked the success of digital marketing campaigns, the ability to track the actual ROI of digital campaigns was the #1 challenge reported by those surveyed, and the #1 goal of their digital marketing programs.

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