After a 70% reduction in US adspend activities in the COVID-19 shadow, McDonald’s has accrued a “sizable marketing war chest” it intends to invest in the back half of 2020, according to Chris Kempczinski, the QSR’s president and CEO.
Kempczinski told an investor conference call earlier this week that Oak Brook, Illinois-based McDonald’s “chose to conserve our resources until the situation stabilized. These funds will now be reinvested in Q3 and Q4.”
Moreover, he continued, “McDonald’s will also invest an incremental $200 million in marketing spend” across its US and international markets “to accelerate recovery” – a sum, he said, that is “roughly equivalent to one additional month of media in every market”.
The brand had adopted a defensive posture following the “shock that went through the system as the pandemic spread”, he acknowledged, but “now, as we go into a more normal – or new normal, next normal – operating environment, it’s time for us to get back on the front foot”.
Though he did not reveal where the additional dollars will be invested, he did boast of the enterprise’s “laser-like focus” on what he called ‘The Three Ds’: Drive-thru, Delivery and Digital. “Thanks to our strategic foresight, McDonald’s is well developed in each of these channels and we see opportunities to extend our Three-D advantage,” he said.
In the last three months, Kempczinski continued, “as customers shifted to a more contactless experience, drive-thru accounted for nearly 90% of our sales … We also continue to see an uptick in delivery and digital transactions per restaurant.
“But in terms of enduring behavior, whether it’s the use of kiosk, the use of mobile, the use of delivery, or the use of drive-thru, certainly one of the things is that customers are looking for is more of a contactless type of experience.
“They’re looking for more of a digital type of experience, one that they can navigate on their own. I do think that that behavior is going to be an enduring change.”
For an investor audience hungry for a quick morsel of marketing plans, Kempczinski did offer this: “As we emerge out of this [there] is certainly going to be a re-dedication from a marketing and investment standpoint to go after breakfast.”
Sourced from Seeking Alpha