Steve Whiteside spoke to Colin Mitchell, SVP/Global Marketing, McDonald’s as part of WARC’s Learn from the best report.
McDonald’s has been a model of consistency in the WARC Rankings, having placed strongly across the creative, effectiveness and media categories in each of the past five years
Colin Mitchell assumed the role of SVP/Global Marketing at the quick-service restaurant (QSR) chain in July 2019, after spending three years as the company’s VP/Global Brand. And he can draw upon an embarrassment of riches – from the iconic Golden Arches emblem to mouth-watering Big Macs and the earworm “I’m lovin’ it” jingle – to build on its impressive, sustained advertising performance.
“We have a phrase which we call ‘feel-good marketing,’” Mitchell explained to WARC. “So, each experience with the brand – it could be a piece of design, it could be a TV ad, or packaging – has to be a feel-good moment, almost like a little dopamine hit.
“It’s an emotional, free sample of the brand itself. We think it gives people a sample, and a reminder, of what the brand does for them – just as the restaurant, hopefully, at its best does.”
A recent case in point is the “Iconic Stacks” billboard campaign from early 2020, which featured a simple list of ingredients from its menu items, which acted as distinctive brand assets without directly naming a product or mentioning the brand.
Prioritising long-term “platforms” that can be built on year after year, over short-term “disposable marketing”
The quick-service category is highly competitive – and features a diverse range of marketing strategies, from the deeply tactical and promotional to irreverent, unbridled creativity.
On its part, McDonald’s emphasises long-term communication “platforms”. This notion is premised on the development of “enduring ideas around particular products or services that acquire accrued fame and meaning amongst consumers over time.”
One case in point is “#ReindeerReady”, a series of festive campaigns from the UK that launched in 2017 and has put the creatures who pull Santa’s sleigh at the centre of heart-warming stories during each subsequent Yuletide period. A further illustration is “Loose Change”, a long-standing initiative from Australia that is connected to the brand’s low-cost menu.
“We’ve tried to encourage the [local] markets to build year after year on a particular communications platform.”
Elaborating on this approach, Mitchell suggested that balancing the “familiar and the surprising” has been impactful. “We find that consumers know what to expect, but they like the variation and difference year after year,” said Mitchell.
That does not mean shifting to a short-term focus, however, as Mitchell asserted his opposition to “disposable marketing” – which is short term in nature, and quickly “thrown away” once it has been released.
“That’s a real peril, particularly in a retail business,” he said. A focus on iteration marks a point of contrast between McDonald’s and Burger King, its fellow QSR, which has proved highly adept at driving buzz with campaigns that rapidly enter the zeitgeist.
As a signal of its own intentions, McDonald’s named independent shop Wieden+Kennedy as its lead US creative agency last year, with one stated aim being to deliver “creative excellence that will influence culture”.
McDonald’s won advertising awards in over 40 countries, reflecting a culture that prizes consistency
Alongside its “vision statement”, Mitchell flagged up several ways that the company has established consistent standards in different geographies:
Setting a Creative Agenda: “Each year, we will take one big theme about where we think creativity generally is going, and we go in and talk that through with the markets,” he said.
Review Days: In these sessions, members of McDonald’s global marketing team visit specific markets to review the brand’s pre-eminent creative on a worldwide basis, as well as its best local output. “That mechanism has worked really well for us in converging around a common vision and elevating the standard of the work.”
Expert “Councils”: McDonald’s runs a “couple of councils” internally that play an essential role in disseminating best practices.
“One’s at the CMO level; we work very closely with our CMOs, we meet often. And we also have what we call a ‘Creative Council’, which is a group made up of the people primarily responsible for actually making the work in the markets,” Mitchell said.
Franchisee Involvement: The operators of McDonald’s franchises have unique knowledge about the messages that drive foot traffic and sales. While these stakeholders may not be schooled in advertising theory like the experts on Madison Avenue, they have crucial insights to provide.
McDonald’s has an extensive menu of key performance indicators to choose from as it seeks to prove return on marketing investment (ROMI)
Mitchell outlined some of the most important metrics:
Sales: The “preferred method” to assess marketing payback, he stated, is “real sales” from restaurants – and system-wide sales rising by 4% on an annual basis (or 7% in constant currencies that account for fluctuations in currency value) to $100.2 billion in 2019.
“Because we’re a retail business, we have very good data for sales daily, in real time,” Mitchell asserted. “The good thing about a QSR is you can tell almost immediately whether something is working or not. It’s a highly advertising-responsive category, and you are left with no doubt whether something works.”
Same-Store Revenue: Within the overall sales figures, same-store performance – which strips out factors like the opening of new restaurants, allowing for direct year-over-year comparison – is critical. This figure rose by 5.9% annually for McDonald’s in 2019, including 5% growth in the US. “That’s a core metric, probably not just for us, but for everybody in our category. It’s a very clean, simple number” that is “universally understood by everybody from a crew member to the CEO,” Mitchell said.
ROMI: Over the last two years, McDonald’s has been “standardizing” the regression methodologies that are employed to prove its marketing impact – an endeavour pursued in a tie-up with Analytic Partners, an analytics consultancy based in New York. “We’re now able to split apart the contribution of marketing.”
Intermediate Measures: As with most marketing organisations, McDonald’s conducts brand and ad tracking to determine its results with softer metrics. Other proxies include how well its entries score at the Cannes Lions Festival and in the Effie Awards, which are focused on effectiveness. Brand valuation is another consideration, too.
These types of numbers are meaningful, but “being a retail business, we find the most effective way is ROMI analysis,” Mitchell said.
As his team looks to continue McDonald’s run of marketing success, they are seeking to be wary of an “ABC” of vices that the company has identified: namely, “arrogance”, “bureaucracy” and “complacency”.
“Obviously, those are perils in any big company,” said Mitchell. “We’ve had success commercially for five years now, but you can’t take that for granted. And we strive to achieve it.”