McDonald’s turns its menu screens into a new money-making machine

McDonald’s is looking beyond burgers and fries for its next revenue opportunity: the digital screens that sit in front of customers.

The fast-food chain is testing advertisements from other brands on menu screens at select company-owned US restaurants, according to a Bloomberg report. The trial places the ads after customers have completed their orders, effectively turning the waiting period between checkout and pickup into potential advertising inventory.

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“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 center of every visit,” a McDonald’s spokesperson was quoted as saying by Bloomberg.

The proposition is straightforward: McDonald’s already owns the physical real estate, has millions of daily customer interactions and has spent years digitising its restaurants. Advertising could allow it to extract another source of income from that existing network without requiring customers to buy anything beyond their meal.

McDonald’s says its US restaurants serve about 26 million people each day and reach nearly 90% of the country’s population over a year. With more than 13,700 outlets in the US, even a limited advertising business could give the company access to a sizeable audience.

A new revenue stream beyond the counter

The experiment comes as McDonald’s works to reinvigorate its US business. Higher costs and weaker traffic have weighed on performance, while comparable sales growth in the US slowed to its weakest pace in more than a year last quarter. The company has been responding with a sharper focus on value, alongside plans to upgrade restaurants and improve food and service.

Its digital infrastructure gives the advertising idea a ready-made foundation.

McDonald’s began installing digital menu boards across its US network roughly a decade ago. By 2019, the company had put them in more than 11,000 US drive-thrus, while many restaurants also use digital displays inside stores and self-ordering kiosks.

That means the company would not be starting an advertising operation from scratch. The screens are already there; the test is essentially about finding out whether the space around a customer's food order can also be sold.

Retailers have already turned similar customer touchpoints into advertising businesses, a model commonly known as retail media. Bloomberg, citing industry research, noted that grocery companies have developed advertising operations around both their physical stores and digital platforms, while quick-service restaurants have been slower to build comparable businesses.

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For McDonald’s, the opportunity therefore extends beyond selling another advertisement. It is a test of whether one of the world's largest restaurant networks can become an advertising platform as well.

The experiment also comes just before McDonald’s first investor day in three years. The company is expected to outline its strategy for reigniting US growth, giving investors a fresh opportunity to assess how the chain intends to expand revenue as its core restaurant business faces a more challenging environment.

(With inputs from Bloomberg)