McDonald’s is reportedly testing advertisements for other brands on digital menu boards at some of its US restaurants, potentially opening up a new source of revenue for the fast-food giant.
The limited test places advertisements on restaurant screens after customers have already placed their orders, allowing McDonald’s to show additional content while diners wait for their food.
With more than 13,700 restaurants across the US and millions of customers passing through its locations every day, the company’s existing network of digital screens could give advertisers access to a sizable audience.
McDonald’s tests ads on digital menu boards
According to Bloomberg, McDonald’s confirmed that the advertising pilot is currently taking place at select company-owned restaurants.
“This limited menu board advertising pilot at select company-owned restaurants is exploring ways to share post-purchase content that customers may find helpful, relevant, or interesting, while ensuring the McDonald’s experience remains at the centre of every visit,” a McDonald’s spokesperson said.
McDonald’s has previously said it serves around 26 million people in the US each day and reaches nearly 90% of the US population over the course of a year.
The company has spent years expanding the number of digital screens inside its restaurants and drive-thrus. McDonald’s began rolling out digital menu boards as part of a broader restaurant modernization effort roughly a decade ago, and by 2019 had installed them at more than 11,000 US drive-thrus.
Digital boards are also found inside many restaurants alongside touchscreen kiosks used for ordering, giving McDonald’s several potential places to display advertising.
The approach follows a model already used extensively by grocery retailers. Known as retail media, businesses sell advertising space across their physical and digital properties while using customer data to help advertisers target and measure campaigns.
A McKinsey & Co survey found retail media can account for between 3% and 10% of grocers’ total profit. Research from Forrester Consulting, meanwhile, found quick-service restaurants have generally lagged retailers when it comes to turning customer data and interactions into advertising businesses.
McDonald’s is testing the ads as it looks for ways to drive growth in the US. Comparable sales during its most recent quarter increased at their slowest pace in more than a year as the company dealt with rising costs and weaker restaurant traffic.
The chain has responded by focusing more heavily on value while also outlining plans to refresh restaurants and improve food quality and customer service.
McDonald’s is scheduled to hold its first investor day in three years on September 23, where shareholders are expected to receive more details about the company’s plans for its US business.
The advertising test comes as McDonald’s prepares for another major promotion in the US, with Monopoly officially returning on October 6.
This year’s game will bring back physical peel-off pieces while offering prizes ranging from free food and rewards points to vacations, vehicles, and a $1 million cash prize. Customers will need to use the McDonald’s app to redeem prizes and collect properties.