McDonald's To Review Its $2 billion Global Media Buying Account
27 October 2017 - 4:19AM
Dow Jones News
By Suzanne Vranica
Fast-food giant McDonald's Corp. is conducting a review of its
massive ad buying account, as the company seeks to find more
efficient ways to spend its advertising dollars around the
globe.
The burger chain, which hasn't done a formal media review in
about 14 years, spends roughly $2 billion on media around the world
annually, according to a person familiar with the matter.
"We are looking at ways to make our marketing dollars work
harder, whether that be through more efficient media spending or
finding more effective ways to connect with consumers," said Bob
Rupczynski, McDonald's vice-president of global media and customer
relationship management.
Omnicom Group Inc.'s OMD has handled McDonald's ad buying
business for more than a decade in the U.S. and is also responsible
for the work in most countries around the world.
McDonald's said its relationship with OMD remains "strong" and
the agency will be participating in the review process. In 2016,
McDonald's consolidated creative ad duties in the U.S. with Omnicom
Group.
The Oak Brook-Ill. company has been making big changes to its
approach to marketing. Earlier this year, it ended its longstanding
partnership with the International Olympic Committee. The company
has been increasing its use of digital marketing and technology.
Its efforts have included offering mobile ordering and payments in
many of its restaurants and rolling out a loyalty program.
Those initiatives will enhance McDonald's ability to harness
more customer data and use the information to do more targeted
advertising. Those approaches can range from digital media
opportunities to targeted TV ads to digital outdoor ads, Mr.
Rupczynski added.
McDonald's hired Mr. Rupczynski earlier this year partly because
of his experience in developing a data-led approach to advertising
for companies such as Kraft Heinz Co.
As part of its ad review, McDonald's said it is moving away from
a single global media agency and will instead select a small number
of ad buying agencies to work with around the globe.
The decision to work with multiple agencies runs counter to the
trend of marketers seeking to save on agency fees by consolidating
ad buying duties at one agency.
"The goal of this is really not to drive down agency fees, the
goal of this is to find what is the most efficient way to reach the
consumer" and to "ensure best in class media services and
capabilities" around the world, Mr. Rupczynski added.
Write to Suzanne Vranica at suzanne.vranica@wsj.com
(END) Dow Jones Newswires
October 26, 2017 13:04 ET (17:04 GMT)
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