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A new advertising initiative at McDonald’s Corp could create an additional revenue stream by using its restaurant network and digital menu boards to display brand promotions. Under the model, advertisements from other companies appear on digital screens after customers place their orders, turning the waiting period before food is served into an opportunity for sponsored content.
The pilot is currently being tested at select company-owned restaurants in the US. McDonald’s operates more than 13,700 restaurants across the country, giving the company a substantial physical advertising footprint if the initiative is rolled out more widely.
"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 in an email.
Against the backdrop of rising operating costs and weaker traffic in its US business, McDonald’s is looking at new ways to strengthen revenue beyond food sales. Comparable sales in the latest quarter grew at their slowest pace in more than a year, encouraging the company to focus on value offerings while also investing in restaurant upgrades, food quality and customer service.
The scale of McDonald’s US network gives the company a sizeable consumer reach. The chain has previously said it serves around 26 million Americans each day and reaches nearly 90% of the US population annually, creating multiple opportunities to engage customers through its restaurants and digital platforms.
McDonald’s began rolling out digital menu boards across its US restaurants about a decade ago as part of a broader modernisation programme. By 2019, more than 11,000 US drive-thrus had digital screens installed. Many outlets also feature digital menu boards inside restaurants, along with touchscreen kiosks that allow customers to place orders.
The advertising pilot comes as retailers and consumer-facing businesses increasingly look to monetise customer interactions. Grocery retailers, for instance, have developed retail media businesses by selling advertising space across physical stores and digital platforms, while using customer data to target and measure campaigns. According to a survey of executives by consulting firm McKinsey & Co, retail media contributes between 3% and 10% of total profits at grocery companies.
Quick-service restaurant chains have been slower to build advertising businesses around customer interactions and data, according to a study by Forrester Consulting. McDonald’s latest experiment suggests that restaurant operators could explore similar revenue opportunities by leveraging existing digital infrastructure rather than depending solely on food sales.
McDonald’s is scheduled to hold its first investor day in three years on September 23, with shareholders expected to seek further details on the company’s strategy to revive growth in the US market.
