McDonald's Consolidates Agency Business With Omnicom
August 29 2016 - 3:11PM
Dow Jones News
By Alexandra Bruell
McDonald's has consolidated its creative agency business with
Omnicom Group in an effort to create a dedicated agency group and
bring its media and creative accounts under the same roof.
After a closely watched review, the change ends the fast-food
giant's 35-year-long relationship with Publicis Groupe's Leo
Burnett agency in the U.S.
Omnicom will be McDonald's new partner for all of its U.S.
national marketing initiatives, Deborah Wahl, chief marketing
officer of McDonald's USA, said in a statement. Omnicom will work
with McDonald's to build a new "agency of the future," she
said.
"Part of building a better McDonald's means not only making
changes to our food and our restaurants but also how we conduct
business," Ms. Wahl said. "In selecting this agency we will have
access to top talent, technology and thinking with digital and data
at the core."
The move brings all creative and media together within Omnicom,
the holding company giant that owns DDB, the creative shop that has
worked with McDonald's for 45 years, and OMD, the restaurant
chain's media agency. It also makes it easier for the holding
company to pool resources to create a dedicated unit -- a trend as
clients look for more cost-efficiency and consistency across
traditional and digital advertising.
"This new model will, over the next few years, create great work
at the speed of the marketplace at an efficient cost," Ms. Wahl
said in the statement.
Publicis' Leo Burnett and Omnicom's DDB were the main
incumbents. Both holding companies created teams with resources
from multiple shops, according to people familiar with the matter.
Publicis' team included tech shop SapientNitro.
McDonald's spent $820 million on U.S. advertising in 2015,
according to Kantar Media, which doesn't count some forms of
digital advertising.
McDonald's joins the many marketers, including Harley-Davidson,
Target and MetLife, that have cut ties with long-term agency
partners in recent years.
Consultancy The Bedford Group issued a report a few years ago
showing that the decrease in relationship tenure between marketers
and agencies didn't happen overnight. According to the report, the
average client-agency relationship tenure was 7.2 years as of 1984
but had declined to just 5.3 years by 1997. As of a few years ago,
the average tenure was "thought to be less than three years."
While the McDonald's decision is a big loss for incumbent
Publicis, it's good news for the creative team at DDB and DDB's
chairman emeritus Keith Reinhard, who was behind the famous "You
Deserve a Break" tagline and catchy
"Two-all-beef-patties-special-sauce-lettuce-cheese-pickles-onions,
on a sesame seed bun" song.
Leo Burnett was behind the famous "Nothin but Net" ad in which
Michael Jordan and Larry Bird compete for a Big Mac.
Despite the agency change, the "I'm Lovin' It" tagline will live
on, McDonald's said.
McDonald's has been trying to find a way to continue to grow
sales after an initial bump from all-day breakfast offerings
started to cool. The fast-food chain is experimenting with new
products in different markets and new ways for customers to order
and pick up meals.
Write to Alexandra Bruell at alexandra.bruell@wsj.com
(END) Dow Jones Newswires
August 29, 2016 14:56 ET (18:56 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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