NinthDecimal Mobile Audience Insights Report. Q Spotlight on Quick Service (QSR) & Casual Dining Restaurants
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1 NinthDecimal Mobile Audience Insights Report Q Spotlight on Quick Service (QSR) & Casual Dining Restaurants
2 Research Overview Consumer Dining Frequency 2 Mobile Influence on Path to Purchase 3-7 Mobile Ad Execution & Engagement 8-9 Mobile Ad Effectiveness Benchmark 10 Connected Trends & Adoption Worldwide Location Highlights Report Overview & Methodology % Our Q4 research report focuses on understanding how mobile is impacting consumers path-to-purchase behaviors specifically for QSR (quick service restaurants) & Casual Dining establishments. The report analyzes key trends and important industry insights in consumers location & mobile adoption and behaviors. We identified the following industry insights. The first examines how growing mobile usage is reshaping consumer behavior with respect to decisions on restaurant and menu choices. The second examines how timing, proximity and various mobile ads affected audience engagement and path-to-purchase decision-making. To measure mobile ROI, we used the industry s most accurate drive-to-location metric, NinthDecimal s Location Conversion Index, for the QSR and Casual Dining vertical as well as our newly launched quarterly Mobile Ad Effectiveness Benchmark for all ad campaigns. The final section identifies key trends in Wi-Fi public locations and connectivity. Key Findings Consumers chose mobile as a source of information influencing dining decisions 117% (2.2x) over online sources. 83% of consumers rely on their mobile device for dining decisions while traveling compared to 63% when in home market. 93% of QSR patrons make same-day decisions on where to dine vs. 64% of casual dining patrons. Menu info (33%), sales/coupons (24%) & location (21%) are the top 3 content categories driving effectiveness of mobile ads for QSR and casual dining brands. 75% of consumers are likely to try a new menu item after seeing a mobile ad. Consumers chose mobile as a source of information influencing dining decisions 117% over online sources Consumers exposed to QSR/casual dining-specific mobile ads visited restaurants 35% more than those who didn t see an ad. 1
3 The Consumer Dining Habit Landscape Which type of restaurants have you eaten at in the last 60 days? Patronage Comparison 23 % 41 % 10 % 2 % 13 % 4 % Moms Dads 36 % QSR Casual Dining Fast Food Casual Dining 19 % 20% 12 % 10 % Women Men Upscale Chains QSR Casual Dining 77% of mobile consumers have visited fast food or casual dining restaurants in the last 60 days Consumers are more likely to dine at fast food restaurants than casual dining chains. Moms visit fast food restaurants 5x more than dads; and casual dining establishments 3.25% more than Dads. Women patron fast food & casual dining establishments nearly 2x more than men. 2
4 Consumers Discovery Methods 58 % 64% How do you typically discover information about fast food or casual dining restaurants? 39 % 43 % 31 % 28 % How are you most likely to discover info on fast food or casual dining restaurants? 18 % 21 % 39 % 23 % 25 % 23 % 21 % 10 % 10 % 22 % Word of Mouth Restaurant review app Billboard or sign Fast Food Patrons Restaurant s website Other Casual Dining Patrons Restaurant s app 39% - Mobile apps 22% - Offline 18% - Online 21% - Other Consumers chose mobile as an info source influencing dining decisions 117% (2.2x) over online sources 39% of consumers use mobile apps to determine where to eat. Restaurant review apps are second only to Word of Mouth for both QSR & casual dining restaurants. Broader restaurant review apps are preferred 4x over branded restaurant apps. After mobile apps, offline & online information sources are close to equal in their influence. 3
5 When Mobile Impacts Decision-Making for the QSR/Casual Dining Audience Which of the following are important when you re home versus when you re traveling? Is your mobile device important in helping you decide where to eat? 61 % 52 % 43 % 58 % 61 % 150 % 63 % 33 % 27 % 27 % 21 % 23 % 37 % 22 % 27% 35 % When Home: Yes 14 % 14 % 14 % 14 % 12 % 83 % Menu Options Proximity Nutrition Facts Special Promotion Wi-Fi Availability Store Hours Directions Drive- Thru Features for Kids When Traveling: Yes Home Traveling 83% of consumers rely on their mobile device for dining decisions while traveling compared to 63% while in their home market Menu options are most important for mobile consumers while in their home market (61%), while a QSR s proximity is most important to consumers while traveling (58%). When traveling, Wi-Fi availability is 61% more important than when in the home market, and directions are 150% more important than when in the home market. 4
6 Consumer QSR Dining Decision Behaviors When do you decide if you re going to eat at a fast food restaurant? Consumer QSR Dining by Day of Week 4 % 2 % 17 % 16 % 12 % 14 % 15 % 13 % 13 % 93 % Mon. Tues. Wed. Thurs. Fri. Sat. Sun. Days Consumers Respond to QSR Ads Same Day 1 Day in Advance Several Days in Advance 20 % 20 % 17 % 14 % 11 % 9 % 9 % Mon. Tues. Wed. Thurs. Fri. Sat. Sun. 93% of QSR patrons make same-day decisions on where to dine Fast food patronage is consistent throughout the week with Friday & Saturday being the most popular days. Consumers engage with mobile QSR ads most on Thursday & Friday by almost a 2x margin compared to other weekdays, and a 1.7x margin compared to weekend averages. 5
7 Consumer Casual Dining Decision Behaviors When do you decide if you re going to eat at a casual dining restaurant? 28 % 8 % Consumer Casual Dining Patronage by Day of Week 18 % 18 % 11 % 13 % 14 % 14 % 13 % 64 % Mon. Tues. Wed. Thurs. Fri. Sat. Sun. Days Consumers Respond to Casual Dining Restaurant Ads 29 % Same Day 1 Day in Advance Several Days in Advance 22 % 15 % 12 % 10 % 6 % 5 % Mon. Tues. Wed. Thurs. Fri. Sat. Sun. 64% of casual dining patrons make same-day decisions on where to dine, but 36% decide one or more days in advance Friday & Saturday were the most popular days for consumers to frequent casual dining restaurants. 51% of consumers were most responsive to casual dining restaurant ads at the beginning of the week. 6
8 Mobile Advertising s Influence on QSR & Casual Dining Patronage Have you ever tried a new restaurant or menu item as the result of seeing an ad? 54 % What information in a mobile ad is most likely to get you to eat at a restaurant? 46 % 4 % Yes 33 % No 21 % 10 % 8% How likely are you to try a new menu item after seeing a mobile ad for it? 7 % 18 % 75 % Likely Not Likely Never 24 % Menu Information Sales or Coupons Locations Nutrition Information Other Giveaways 75% of mobile consumers are likely to try a new menu item after seeing a mobile ad Menu info (33%), sales/coupons (24%) & location (21%) are the top 3 content categories driving effectiveness of mobile ads for QSR & casual dining brands. Menu information is 38% more important than sales or coupons in influencing consumers dining choices. 46% of consumers have tried a new restaurant or menu item as a result of a mobile ad. 7
9 QSR & Casual Dining Mobile Ad Creative Executions 68 % 74 % 52 % 48 % 43 % 40 % 32 % 26 % 21 % 15 % 6 % Rich Media Ad Banner Ad Menu Info in Banner Deals/Offers in Banner Locations Mobile Website Video Offers Custom Download App Menu Tab Ad Type Banner Content Ad Engagement/CTA Menu info & deals/offers were the primary ad creative focus for QSR & casual dining 68% of mobile ads leveraged rich media ad formats. Ad engagement was led by location information at 74%, followed by connecting to brands mobile website at 42%. 40% of campaigns include video as post-click actions. 8
10 Consumer Ad Engagement by Proximity to QSR & Casual Dining Establishments QSR & casual dining restaurant ad performance vs. Avg. CTR by proximity to location On Site <1 mi. 1-2 mi. 2-5 mi mi mi. -14 % +8 % +10% +5 % +4 % +15% QSR & casual dining restaurant ads perform 15% better than the average CTR when miles from the establishment QSR & casual dining ads underperform by 14% when a patron is on site vs. our average campaign CTR. Mobile ad campaigns for this vertical perform best within 2 miles of the establishment or 10 miles+ from the location, which is supported by home market vs. out-of-market behavior. 9
11 Mobile Ad Effectiveness Benchmark: Drive-to-Location for all 2H 2013 Campaigns Drive-to-Location for QSR & Casual Dining % % % % General Population LCI Audience Matched Control LCI Exposed Audience LCI General Population LCI Audience Matched Control LCI Exposed Audience LCI Methodology: Using Location Conversion Index we benchmarked all drive-to-location campaigns from the 2 nd half of 2013 to measure the overall success of our clients mobile ad campaigns. First we established a normal visit rate for the general population to the locations as an index of 100. Then we compared visits of audiences exposed to the mobile campaigns to a mirror control group of unexposed consumers. The result measures the incremental visits driven specifically by mobile advertising. Mobile ads drove 21x the store visits vs. consumers not exposed to the ads for all 2H 2013 campaigns Mobile ad campaigns delivered a 54% lift over the general population and a 37% lift over the control group. Marketers effectively executing drive-to-location mobile campaigns can see significant lift in foot traffic. Exposure to mobile QSR & casual dining ads drove 33x the store visits vs. consumers not exposed to the ads Mobile ad campaigns delivered a 47% lift over the general population and a 35% lift over the control group. QSR & casual dining marketers saw positive ROI and significant lift in foot traffic via drive-to-location mobile ad campaigns. 10
12 Connected Device Trends: Public Wi-Fi Usage How are consumers connecting to Wi-Fi? Year-Over-Year Device Adoption 19 % 22 % 24 % 23 % 23 % 39 % 38 % 40 % 45 % 44 % 42 % 40 % 36 % 32 % 33 % Q Q Q Q Q % Growth in the percentage of mobile connections, year over year 21 % Decline in the percentage of laptop connections, year over year Smartphone Tablet Laptop Mobile devices grew from 58% to 67% of Wi-Fi connections year over year, a 16% lift 67% of all public Wi-Fi usage was represented by mobile devices, with smartphones at 44% & tablets at 23%. Laptop usage decreased to 33% of usage, a relative decrease of 21% year over year. In Q4 2013, mobile Wi-Fi connections plateaued. 11
13 Connected Device Trends: U.S. Highlights Top 10 Wi-Fi Mobile Devices: Q Top Wi-Fi Mobile OS: Q Q4 Rank Mobile Device Top 10 Q % of Ad Requests Q Rank % Change in Market Share Q4 Rank Mobile Device OS Q % of Ad Requests Q Rank % Change in Market Share 1 Apple iphone 35.1% 1-6.0% 2 Apple ipad 28.6% % 3 Samsung Galaxy S III 8.1% % 4 Apple ipod Touch 3.6% % 5 Samsung Galaxy S II 2.4% % 6 Samsung Galaxy Note II 2.1% % 7 Kindle Fire 7 1.9% 6-0.5% 8 Samsung Galaxy S 4 1.2% % 9 Google Nexus 7 0.6% % 10 LG Venice 0.5% N/A* % 1 ios 64.5% 1-0.5% 2 Android OS 33.1% % 3 RIM OS 1.0% 3-9.0% 4 Windows OS 1.0% % 5 Other OS 0.4% % * LG Venice was below the 100th rank in Q3 Samsung accounts for 4 of the top 10 devices connecting to public Wi-Fi for the fourth quarter in a row The iphone & ipad remain in the top 2 spots with the ipad gaining 35.9% market share after losing 31.7% last quarter. The Samsung Galaxy Note II outpaced Kindle Fire for the first time. ios & Android continue to dominate the market as the top Wi-Fi mobile operating systems Android is consistently increasing market share for the fourth quarter in a row. Wi-Fi usage with Windows OS increased 27.7%. Note: NinthDecimal measurement includes all mobile device types in order to provided complete view of how the on-the-go audience is connecting. 12
14 Worldwide Location Highlights: Public Wi-Fi Locations Worldwide public Wi-Fi locations , ,783 Worldwide quarterly growth in public Wi-Fi locations 841, , , , , , , Q Q Q Q Worldwide public Wi-Fi locations YOY growth plateaued in 2013 While Q saw the most significant increase in global quarterly growth in public Wi-Fi locations, 2013 in general only saw a 3% increase. Global public Wi-Fi locations increased 293% from , and 124% from
15 Worldwide Location Highlights: Public Wi-Fi Locations Q4 Rank Country Q Number of Locations Q Rank % Change Public Wi-Fi business models: U.S. Q % 1 South Korea 186, % 2 United Kingdom 182, % 3 United States 152, % 4 China 104, % 5 France 35, % 6 Taiwan 24, % 7 Russian Fed. 16, % 8 Japan 15, % 9 Germany 15, % 10 Sweden 9, % 84.4 % Paid Free Public Wi-Fi business models: Worldwide Q % 76.1 % Paid Free Free Wi-Fi accounts for 84.4% of U.S. hotspots and 23.9% of worldwide hotspots The U.S. saw the most growth in free Wi-Fi with a 5.9% increase. South Korea remained the country with the most public Wi-Fi locations with minimal expansion in Q4 as was the case with every country other than the U.S. 14
16 Q NinthDecimal Mobile Audience Insights Report The Q4 Insights Report highlights recent mobile market audience usage trends offering advertisers insights they can apply to their mobile strategies and campaigns. This quarter focused on quick service (QSR) and casual dining restaurants. NinthDecimal is the leading location-powered mobile advertising and data platform. Used by major retailers and marquee brands across verticals, NinthDecimal leverages proprietary historical and present location data to engage advertisers desired audiences across all mobile devices at scale. Our ROI-driven approach and unique data platform integrates our Wi-Fi and mobile location big data to deliver true one-to-one mobile audience targeting at four times higher performance over traditional mobile targeting or geofencing. NinthDecimal has been an innovative leader in evolving mobile advertising and delivering mobile audiences since Today our ad technology is powered by our location big data platform of over 20 billion location tags from more than 850 million devices. Q3 Launched the market s first Mobile Ad Effectiveness Benchmark leveraging NinthDecimal s Location Conversion Index (LCI ), the mobile industry s most accurate drive-to-location metric. In this report we measured the effectiveness of our 2 nd half 2013 drive-to-location campaigns across all verticals. NinthDecimal s LCI offers marketers the ability to measure the ROI of their mobile spend by providing the actual increase of in-store visits directly attributed to their mobile ad campaign. Methodology NinthDecimal s Mobile Audience Insights Report research is based on data compiled from a survey of 2,260 randomly selected mobile users, as well as the billions of data points from NinthDecimal s proprietary Wi-Fi and mobile advertising platform. Location Conversion Index measures ROI by finding the normal visit rate for the general population, then comparing it against audiences both exposed and not exposed to mobile campaigns in order to measure incremental store visits. The survey data was collected from November - December 2013 while the platform data analyzed was from Q4, and the Mobile Ad Effectiveness Benchmark results were from 2H Quarterly public Wi-Fi location rankings and business model distributions are based on the final day of the quarter. 15
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