Extra Value on the Menu for McDonald’s Agencies

13 November 2002

The belt-tightening at McDonald’s looks to be spreading to the firm’s marketing operations, with reports that the fast food titan is asking its ad agencies to cut fees by up to 25%.

US senior vp–marketing Bill Lamar is said to have discussed the idea with agencies in recent weeks. The principal shops on the business, worth upwards of $400 million (€396m; £252m), are DDB Worldwide and Leo Burnett USA, both in Chicago.

The golden arches have lost their luster of late. As reported yesterday [WAMN: 11-Nov-02], fourth-quarter earnings estimates have been slashed by 55%, up to 600 jobs are under threat around the world and seven markets in the Middle East and Latin America are to be abandoned.

McDonald’s – whose upcoming ad campaigns will focus on value and the new Dollar Menu – dismissed reports of an agency fee reduction as “speculation”.

Data sourced from: AdAge.com; additional content by WARC staff