Franchise brands are continuing to make more sophisticated and substantial marketing investments than ever before, and the competition for their select partnerships has become increasingly intense. As a CMO operating in this high-stakes environment, it can sometimes be difficult to cut through the noise and ultimately pick the right partner to support your brand and franchisee marketing initiatives. Some agencies, suppliers, ad-tech companies and other vendors, in a rush to secure business at all costs, have taken advantage of franchisors and franchisees through a variety of misleading practices and a lack of transparency. These are three key challenges that I personally believe any CMO of a franchise system should be aware of when choosing a reliable marketing partner.
Hidden Click Costs
When taking over previously-managed franchisee ad campaigns from other industry vendors, it is not uncommon for our teams to find that those vendors were actually adding 30-50% margins on top of pass through click costs. In these engagements, the vendor delivers metrics for clicks and cost to the franchisee. But when these are broken out properly, the cost-per-click ends up being inflated — a hidden markup that has a larger impact than just an unofficial “one-time fee”. These markups are sometimes so aggressive that they stunt the potential of the ad campaign, creating a cycle of limited budgets, less exposure, and fewer leads and sales for the franchisee.
Franchisees typically have access to performance data that includes impressions, total clicks, CTR, and total Adspend. However, many vendors either hide or refuse to report on actual click costs to franchisees within their own reporting dashboards even though those metrics are easily accessible via API from channels like Google.
In the real-life example of a franchise supplier dashboard above, each franchisee is currently required to manually calculate their actual click costs on their own, outside of the reporting platform provided to them. This approach lacks transparency and does not allow the franchisee to access the information they need in order to assess not only ad campaign performance, but whether or not they’re actually getting real value out of their campaigns relative to their ad spend costs.
Loss of Owned Media Assets
One tactic employed by a variety of franchise vendors involves encouraging (or sometimes requiring) franchise systems to host their brand website and location pages on the vendor’s custom content management system. If a vendor proposes that these assets live on their own proprietary platform, it’s important that those on the brand marketing team understand that they are forfeiting ownership of these assets – despite dubious claims by the vendor in question that they will turn over all web assets (i.e. HTML files) at the end of the engagement. In these cases, the vendor owns the franchise system’s website and location pages and subsequently all the information and data tied to those web assets; the franchise system is essentially renting from the vendor.
This relationship often leads to a variety of challenges, including undermining long-term SEO efforts and positive ranking potential, an inability to conduct usability tests, and limitations on content creation. It also creates a complicated and potentially damaging environment when a franchise system must transition to a new vendor, as many of those assets can be lost during the transition, forcing the brand to virtually start over.
Franchisors working off platforms that host location pages on a different IP address, in a Subdomain environment have additional challenges, such as an inability to build search ranking authority for their own brand website, an inability to place important ad campaign conversion tracking parameters, and virtually no opportunity to conduct robust audience remarketing due to a lack of data control (example below).
The bottom line: if you don’t own (or host) your own website, you’re forfeiting your ability to make informed business decisions about how your customers and prospective customers are interacting with your brand online.
Overpaying for Under-performing SaaS Platforms
Did you know the most popular local digital marketing product is free? So why are many ad tech companies reselling Google My Business to franchise systems at marked up costs without providing any actual services in the process? It’s often because these Software-as-a-Service(SaaS) companies need to offset the tremendous amount of money needed to build a reporting platform on top of Google’s API.
Reminder: Google’s API includes Google My Business, Google Analytics, Google Search Console. Also free.
Managing these programs at scale (with or without a SaaS platform) does come with costs — mostly in the form of human resources in addition to accessing, building, and maintaining an API feed. But in total, these costs can often be a fraction of what your own franchise may currently be paying for such a program.
SaaS platforms are only as effective as the professionals that manage them. That means if you’re investing in SaaS technology, you’re essentially committing to training and retaining a dedicated team of experts, something ad tech companies are often neglecting. That’s where partnering with a experienced supplier and vendor can be a distinct advantage. With myriad technology platforms and tools available, it’s important to remember that technology represents one side of the coin – quality management by real experts is what will ultimately drive top performance on both national and local levels.
In Summary
It’s imperative that every franchise system fully understands the long-term impact the business relationships they forge can have on the future of their brand. These are decisions that must be carefully vetted using technical expertise and data analysis, and a lack of understanding of your existing (or future) website environment and digital campaigns can often present a wealth of unforeseen challenges. Improving marketing for your franchise brand starts with both quantitative and qualitative analyses of your brand and digital assets in order to formulate a proper strategy, while holding your vendors and suppliers accountable for transparency, performance and value for both your brand and franchisees.
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