McDonald’s Tests Brand Ads on Digital Menu Boards to Build New Revenue Stream

McDonald’s Corp is testing a new advertising model that could turn its restaurant network and digital menu boards into an additional revenue channel. The company is displaying advertisements from other brands on digital screens after customers complete their orders, using the waiting period before food is served to deliver sponsored content.

The pilot is being conducted at select company-owned restaurants in the US. With more than 13,700 restaurants across the country, McDonald’s has a large physical footprint that could provide significant advertising inventory if the model is expanded.

"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.

The initiative comes as McDonald’s works to address higher operating costs and softer traffic in its US business. Comparable sales in the latest quarter increased at their slowest pace in more than a year, prompting the company to focus on value offerings while also planning restaurant upgrades and improvements in food quality and customer service.

McDonald’s has previously said that it serves about 26 million Americans each day and reaches nearly 90% of the US population annually. That scale gives the company access to a large consumer audience through its restaurants and digital customer touchpoints.

The chain began upgrading its US restaurants with digital menu boards around a decade ago as part of a broader modernisation programme. By 2019, more than 11,000 US drive-thrus had digital screens installed. Many restaurants also use digital menu boards inside their dining areas, along with touchscreen kiosks for ordering.

The advertising test reflects a broader shift in the retail and consumer industries towards monetising customer interactions. Grocery retailers have built advertising businesses by selling space across physical stores and digital platforms, while using customer data to target and measure campaigns. Executives surveyed by consulting firm McKinsey & Co said retail media accounts for three per cent to 10% of grocers’ total profit.

Quick-service restaurant chains have been slower to develop advertising businesses around their customer data and interactions, according to a study by Forrester Consulting. McDonald’s latest test indicates that restaurant operators could increasingly explore similar opportunities by using existing digital infrastructure rather than relying only on food sales.

McDonald’s is scheduled to hold its first investor day in three years on Sept 23, where shareholders are expected to seek more details on the company’s plans to revive growth in the US market.