McDonald’s Tests Drive-Thru Advertising.

McDonald’s is expanding its digital strategy beyond ordering and loyalty programs, testing third-party advertising on digital menu boards as the fast-food giant looks to create new revenue while overhauling its broader restaurant business.

The company said this week that it has begun piloting a McDonald’s Media Network at 450 company-owned U.S. restaurants. The initiative allows advertisers to reach customers through digital menu boards, kiosks, the McDonald’s app and other digital touchpoints. McDonald’s executives said the company ultimately sees the media business as potentially generating $1 billion in annual revenue.

The company, regularly among radio’s top advertisers, is playing in a space where competition is fierce. McDonald’s, which has more than 15,600 spots for the week of Sept. 14-20, trailed only Wendy’s (36,024) in the Fast Casual/QSR category, and was ahead of brands like Chick-fil-A, Popeyes and KFC.

The drive-thru portion of the McDonald’s program is receiving particular attention. At participating restaurants, advertisements from outside brands can appear on digital menu boards after customers have completed their orders, while they wait to move forward and receive their food.

McDonald’s described the initiative as a limited pilot at select company-owned restaurants.

“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 told Bloomberg.

The advertising initiative comes as McDonald’s attempts to strengthen its U.S. business and improve restaurant economics. At its investor event on Wednesday (Sept. 23), the company unveiled McDonald’s > NEXT, a new growth and productivity strategy focused on food quality, value, personalization, restaurant efficiency and technology.

McDonald’s said it wants to gain 1.5 percentage points of market share in both the chicken and beverage categories by 2030 while maintaining its leadership position in beef. The company also is targeting an operating margin in the low-to-mid 50% range and approximately 250 basis points of gross restaurant-level efficiency improvements by 2030.

Technology is a central part of the strategy. McDonald’s plans to deploy its generative-AI-powered ArchIQ system more broadly, with the company saying the technology can improve restaurant operations. The company also is building common technology platforms and a single enterprise data foundation across its global restaurant system.

The media-network effort gives McDonald’s another way to use that digital infrastructure. The company has more than 13,700 restaurants in the U.S. and says it serves approximately 26 million U.S. customers each day. Its mobile app had 41.9 million unique U.S. visitors in March, according to Comscore data cited by eMarketer.

McDonald’s is also emphasizing fewer, larger marketing campaigns and increased use of its own brand properties rather than relying as heavily on short-term promotional partnerships. Executives said the approach is intended to make marketing more efficient while strengthening relationships with customers.

The company said the broader NEXT strategy will be supported by approximately $8.5 billion in partnering support for franchisees through 2036, including about $5 billion through 2030, to help fund restaurant modernization, technology deployment and operational improvements.