Saturday, June 27, 2009

What it must be like to have a $1 Billion Dollar Advertising Budget...

McDonald’s 2008 Ad Spending Topped $1.2 Billion

It was recently reported byAdvertising Age magazine in its June 22 issue, McDonald’s Corp. spent $1.201 billion on U.S. advertising in 2008, ranking it No. 29 among the 100 largest advertisers. What it must be like to have that size advertising budget!

Many restaurant operators ask "how much money should I spend on advertising?" and I usually say "spend at least 2% of gross sales." The industry average is somewhere between 2-4% and McDonalds, with over $1 billion ad dollars represents approximately 4% of sales.

Big Mac is one of five restaurant companies included by Ad Age in its 100 Leading Advertisers list. Yum! Brands–parent of KFC, Pizza Hut and Taco Bell–is the only one of the five to decrease total ad spending last year (down 4.3%) and the only one to lose ground in the rankings (sliding to No. 41 this year from 39 a year ago). Burger King Holdings showed the greatest increase in ad spending (6.5%), followed by Subway (5.4%). Wendy’s/Arby’s Group increased total ad spending 1.9% in 2008. The magazine’s list is based on both measured-media advertising such as TV and radio and unmeasured media such as promotions.

According to Ad Age, McDonald’s, Burger King, Wendy’s/Arby’s and Subway each spent 4% of their total sales on advertising. Yum! spent 5.2% of total sales on advertising.

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