Thoroughly modern marketing: McDonald's updates advertising to remain 'forever young'

Nation's Restaurant News 4/11/05

Armed with one of the world's top 20 corporate advertising war chests, McDonald's Corp. has introduced millions of consumers to such memorable ad slogans as "You deserve a break today" and "We do it all for you."

It also set the nation to singing in 1974, when countless Americans tried their hands at finishing the Big Mac jingle, "Two all-beef patties, special sauce, lettuce, cheese…," which was the center of a popular campaign for the chain's signature Big Mac sandwich.

Regardless of the slogan, McDonald's has adhered to one marketing strategy for the greater part of the last 50 years: Be the fun, friendly place for families.

"We were that famous Norman Rockwell family experience," says Larry Light, McDonald's executive vice president and global chief marketing officer.

Since September 2003, however, McDonald's has focused on creating a more modern image with its global "i'm lovin' it" marketing campaign, which features youthful images, hip music and sports and music celebrities.

Still, the 50-year-old megabrand has deep roots with consumers of all ages, many of whom grew up with the chain's Ronald McDonald and the rest of his crew, including Hamburglar, Grimace and Mayor McCheese.

In the early years, McDonald's marketing consisted chiefly of local print advertising, mostly bought by franchisees eager to drive business in their communities.

But in the 1960s, with TV growing more effective as an ad medium and the rapid expansion of the McDonald's system — first in the United States and then in Canada — local advertising was no longer enough.

In 1967 McDonald's launched its first national TV campaign with $3 million pooled by franchisees, who previously relied on commercial time purchased on their local TV and radio stations. A year later, McDonald's hired its first major ad agency, D'Arcy Advertising of St. Louis. The firm created the campaign that introduced Americans to the Big Mac, which had just been launched nationwide. McDonald's later hired Paul Schrage, the D'Arcy media buyer working the account, as the fast-food chain's first senior executive vice president and marketing chief officer. D'Arcy, however, resigned the McDonald's account in 1969 to concentrate on its largest client, Standard Oil.

McDonald's then turned to Chicago ad agency Needham, Harper and Steers — known today as DDB Needham — which in 1971 created the "You deserve a break today" campaign. The TV jingle quickly became one of the most identifiable advertising themes in American history.

By the mid 1970s, the thrust of McDonald's advertising had shifted from local efforts to national campaigns, such as "We do it all for you" in 1975 and "You, you're the one" a year later.

Operators, however, had been pressuring McDonald's for more product-focused advertising, and Needham responded in 1974 with the catchy slogan "Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun" for the Big Mac. The first TV spots used actors to sing the jingle, but subsequent commercials featured real people to forge an even closer bond with customers.

Dean Barrett, McDonald's senior vice president of global marketing, recalls that the Big Mac slogan appeared in newspaper inserts, on T-shirts, and even in restaurant contests, which rewarded customers with a free Big Mac if they could sing the jingle.

"It became the No. 1 requested song on the radio, and it wasn't even a song, Barrett says. The campaign was the expression of McDonald's in its own time, in terms of the fun attitude."

In the 1980s, McDonald's introduced such ad slogans as "It's a good time for the great taste of McDonald's" and "Nobody can do it like McDonald's." The 1990s opened with McDonald's adopting "Food, folks and fun" as its national ad theme, which gave way in 1995 to a variation of another popular theme: "Have you had your break today?" Three years later, McDonald's advertising posed another question: "Did somebody say McDonald's?"

By 2000 the theme became "We love to see you smile," and the chain began to reassess its marketing strategy. The "food, folks and fun" message of the '60s, '70s and '80s was no longer relevant, Light says. Although consumer lifestyles, taste and attitudes had changed, he says, the chain's marketing strategy had not. The loyal customers from those decades didn't stop eating at or bringing their kids to McDonald's, but they were eating there less often. Still, that was good news, according to Light.

"Usually, when a brand doesn't stay relevant, the consumer just abandons it and goes somewhere else," Light explains.

"But we had this wellspring of affection going back to people's childhood where they genuinely had fond memories of our brand. They wanted us to succeed."

The challenge for McDonald's was to increase visits from its traditional customer base while appealing to a new generation of diners. That meant changing the brand's "sweet spot," Light says.

"The brand image, not the customer base, was about being a great place for families," Light says. "That was where the brand equity was mainly anchored: family place, mom bringing a child, Happy Meal. Our new sweet spot is 18- to 24-year-olds."

Communicating with that demographic, however, doesn't mean McDonald's would not appeal to other age groups. In the long run, it's not really age that's most important.

Says Barrett: "McDonald's is not about an age. McDonald's is about an attitude."

The essence of McDonald's newest branding initiative, Light says, can be summed up in two words: "Forever young."

"We previously had used the phrase 'McDonald's appeals to the child in every one of us,'" he says. "Our new phrase is 'McDonalds appeals to everyone who is young at heart.' That's not just another phrase. The tonality is different. Because youthful and young at heart is not the same as child, children and childish."

With its new campaign, the voice of McDonald's has changed from "you" to "I," Light says, adding that "the previous voice was right for its time."

Some of McDonald's most famous — and effective — campaigns in the past had themes such as "Your kind of place," "You deserve a break today," "You, you're the one," "What you want is what you get at McDonald's today," and "Have you had your break today?"

The change in strategy reflects the point of view of the consumer rather than McDonald's point of view, Light says.

"It's a huge mind shift. I would say that's the most radical change in our executional approach since 1967," Light says.

That shift led to the creation of "i'm lovin' it," McDonald's first global advertising campaign. While the fast-food giant switched lead agencies several times over the years, it now has an international multi-firm approach, retaining DDB Needham, Leo Burnett and TBWA as its global marketing partners, which oversee offices in every one of the 119 countries where McDonald's does business. In addition, the Cossette Communications Group handles McDonald's Canadian marketing and the Dentsu Agency oversees the chain's business in Japan. The "i'm lovin' it" slogan emerged nearly two years ago after McDonald's asked its stable of 14 ad agencies around the world to bring their best ideas forward.

The "i'm lovin' it" concept was created by the chain's longtime German agency, Heye & Partners, based in a suburb of Munich, and the campaign was launched in the small town of Unterhaching, Germany on Sept. 3, 2003.

Initially, the strategy was viewed as such a radical change in brand marketing that it made a lot of people, including analysts and commentators, skeptical, according to Light.

But so far consumers are noticing the campaign, Light says.

"Most people believe we've increased our advertising weight substantially, and the fact is, we didn't," he says. "What we have increased substantially is the effectiveness of the advertising, and as a result the impression is that our weight has gone up because our awareness has gone up. That's one of the lessons. When you increase relevance, it sticks in people's minds. They're noticing it because it's relevant, but we're not advertising more," he says.

McDonald's Corp.'s 2003 global ad budget was $1.21 billion, which represents measured media only, according to Ad Age, which ranked the company 19th among the world's "Top 25 Global Marketers."

Since "i'm lovin' it" was launched, McDonald's has sustained strong sales growth. For the year ended Dec. 31, 2004, McDonald's global comparable sales jumped 6.9 percent. Fiscal 2004 was the first time in 17 years McDonald's reported positive same-store sales in every month. Comparable-restaurant sales for the year at U.S. McDonald's units were up 9.6 percent for the year — the highest annual result in 30 years.

Beyond advertising, McDonald's also is moving in a more contemporary direction with its promotions, making strategic moves in four key areas: sports, music, fashion and entertainment.

In a first for the company, McDonald's formed a global sports alliance with Yao Ming of the NBA's Houston Rockets. Leading up to the 2008 Olympics in Beijing, television viewers increasingly will see Ming as a spokesman for McDonald's, with specific attention given to the Asian and China markets, Light says.

McDonald's launched its new "i'm lovin' it" campaign with Justin Timberlake writing and recording an original song incorporating the five notes in the "i'm lovin' it" theme. The song was placed on the lead page on Timberlake's fan Web site and became the No. 2 pick on MTV's "Total Request Live" show, which, according to MTV, is a first for such a song.

McDonald's also formed a strategic alliance with the musical group Destiny's Child, featuring Beyonce, and is working with the group on a 70-city tour called "Destiny Fulfilled and Lovin' It."

The chain's new marketing philosophy even was reflected in the way Timberlake and Destiny's Child were approached, Light says.

"We didn't take our jingles and say to Justin, 'Record this,'" Light says. "Again, today's consumer is not the same as 20 years ago. They won't accept that. They'll call it commercialization. Or, in their terms, selling out."

In the fashion arena, McDonald's is launching a line of children's activewear under the brand name "McKids" in 80 cities around the world. In Canada the chain is using more modern designs for its crew uniforms. And in the Netherlands, the T-shirts worn by McDonald's employees were so popular they are being sold in department stores.

"The ultimate measure of our success will be when people wear our logo with pride — both employees and consumers," Light says.

In the entertainment arena, McDonald's believes the big opportunity is in online and downloadable gaming, which is a popular leisure activity for young people.

The company is hopeful that it may have a winner with its new "hip" and "relevant" campaign. Officials say they have learned a valuable lesson from the new advertising.

"Our brand has always got to relate to the consumer," Barrett says. "We did it in different ways in different times, sometimes knowingly and sometimes with just the savvy and instinct of what a guy like [McDonald's founder] Ray Kroc taught all of us."

Barrett adds that Kroc used to say — either confidently or eerily prophetically:

"I don't know what we'll be selling in the year 2000, but whatever it is we'll be selling more of it than anyone else."

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