Fast Food Is Beating Fast Casual on Mobile and Social Media

A new report from digital intelligence specialists L2 has good news for many old-school fast food brands.

The company’s 2017 edition of its L2 Digital IQ Index for restaurants looks at 126 restaurant brands in the United States and benchmarks each based on 12 criteria that speak to the brands’ effectiveness on mobile, social media, desktop, and digital marketing.

The L2 Index gives brands an overall score and ranks them according to the final number, which penalizes brands that do not have a well-rounded digital strategy. L2 makes judgments, too, about what is a best practice. This means things like mobile coupons, rewards programs, and digital payment options are signs of a strong digital brand.

L2 groups the 126 brands into five categories: Genius, Gifted, Average, Challenged, and Feeble. The majority of the list is in the first three groups, but only the first four are considered “Gifted.”

The Winners

Top 10

  1. Starbucks
  2. Pizza Hut
  3. Panera
  4. Domino’s
  5. Chili’s
  6. Olive Garden
  7. Papa John’s
  8. Denny’s
  9. Chick-fil-A
  10. Dunkin’ Donuts

The winners on L2’s list are older, more traditional brands while fast casual standouts lag behind considerably.

A good example of this is Domino’s showing. “Domino’s Pizza Tracker was released years ago, but remains best in class,” reads the report. It’s power on organic search is strong on multiple levels, including even slight unbelievable ones: Searches on Google for “domino’s wedding registry” outperformed searches for wedding registries at Macys or Amazon.

Although not in the top 10, interest in McDonald’s delivery spiked in May after UberEats partnership was announced, and it has continued to rank in the top 20.

Some brands are incredibly dominant to the point where competition doesn’t really deserve that name. Starbucks, for instance, has 60% of the entire restaurant share of Instagram.

Other outliers in the report include Wendy’s, which saw its #NuggsforCarter campaign double its Twitter following in a few months. On Snapchat Hooters, the restaurant which few people openly admit to going to, has the second best Snapchat performance of all restaurants.

A simple piece of advice for all brands: Loyalty rewards emails are the second most opened type of emails, just slightly less than birthday emails.

The Losers

Private equity-backed brands don’t do nearly as well as their conglomerate competitors. “Conglomerates do a better job of holding up their weakest brands through shared digital infrastructure,” the report reads. Yum! Brands Inc. and Darden Restaurants brands perform the best, with all private equity-backed brands performing significantly worse, with brands largely in L2’s Challenged or even Feeble classification.

Source: L2

Panera, which has only been owned by JAB Holding Co. since July of this year, slightly skews the PE firm’s numbers, and without it the firm would be ranked in the middle of its pack.

Among fast casual and other upstarts, Chipotle is by far the tops at 12. In the “Challenged” category are Sweetgreen at 73, Shake Shack at 78, Stumptown at 89, Blue Bottle at 91, and Chopt at 99. It’s safe to say that no restaurant upstart in fast casual or any other category is close to the established players by L2’s metrics.

Overall “The industry has yet to capitalize on the pervasive use of mobile devices by developing parallel, if not better, mobile experiences relative to desktop.”

The Challenges

Brands are facing real-world competition from one another, but they also must battle for discovery on digital with rivals buying up their names via Google AdWords as well as the persistent challenge from Yelp. The beginning of the report reminds readers how powerful the user-generated review site has become, calling it a “critical but challenging partner for restaurants.”

“Yelp is by far the most visible listing on Google search results for unbranded restaurant keywords,” the report reads. “Brands … need to contend with the fact that Yelp is virtually unbeatable in SEO.”

On search, paid and organic search is up across the industry, but it is not spread evenly among all players. Bloomin’ Brands (Bonefish, Carrabba’s, Outback), for instance, is the biggest buyer of AdWords among the brands L2 tracks.

The report cites an increase in keyword search since Sept. 2106 for the terms “restaurants near me,” “pizza hut,” “pizza,” “coffee,” and “mcdonalds.” The biggest losers during the same period were “papa johns,” “jimmy johns,” and “subway,” hinting at a waning interest in sandwiches.

Digital video is resonating well with users, but at an incredibly high cost. Facebook remains an important part of digital marketing, but the vast majority of activity on the site, as well as YouTube, is driven by spending. According to L2, 94% of views were paid for on Facebook, while 91% were paid for on YouTube.





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