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Fallon McElligott, Minneapolis, parted ways with McDonald's Corp. last week after about a year on the fast-food giant's roster.

The announcement came three days after Holiday Inn pulled an ad by Fallon designed to launch a new $30 million branding campaign. That showed how quickly even a hot agency can land on the hot seat.

Fallon, however, could get right back into the fast-food category. Domino's Pizza has invited the agency to pitch its $75 million account.


Domino's hired Laurel Cutler as a consultant on the review; she served in the same capacity for United Airlines in a review Fallon won last fall along with Y&R Advertising.

Chairman Pat Fallon in a statement called the year with McDonald's "a rare professional privilege to represent one of the world's most brilliant brands."

But the relationship proved problematic. McDonald's had hired Fallon to handle the $75 million launch of its Arch Deluxe sandwich line. Last spring, Fallon produced a splashy, humorous campaign that targeted the sandwiches to "grownup tastes."

"There's a real debate about whether it was appropriate to position this as an adult sandwich for a brand structure that is so invested in kids," said David Adelman, analyst for Dean Witter Reynolds.

After the launch, McDonald's sought more product-oriented advertising for Arch Deluxe, but Fallon declined, telling McDonald's it was a branding agency, not interested in product or pricing ads. McDonald's core agencies- Leo Burnett USA and DDB Needham Worldwide, both Chicago-began to get Arch Deluxe assignments even as Fallon produced and aired a second round of spots.


By November, Fallon's work was off the air, and the agency and McDonald's were debating what Fallon should do next.

"Too many agencies make compromises and settle for mediocrity. We're not going to do that," said Mark Goldstein, president-integrated marketing at Fallon. "Brad Ball [McDonald's USA senior VP-marketing] has been understanding and terrific about this."

Mr Ball said: "In the final analysis, Pat Fallon had to make a business decision. It's frankly disappointing-I liked having Fallon's creative style in our roster. He must be pretty confident that they've got a good shot" at Domino's.

"[Fallon's] future at McDonald's was very limited, and I think they saw that," said an executive with a rival agency. "Domino's is probably a bigger opportunity for them and a better one."

Mr. Goldstein said Fallon will continue to work on Holiday Inn, noting that more work in the "On the way" campaign is in the pipeline" (see story on Page 14).

Of the controversial launch ad, featuring a transsexual, he said, "We got a lot of publicity, and I think everybody who's talking about it knows that Holiday Inn has spent a billion dollars on renovations."

Reviews have also been mixed for Fallon's first ads for Miller Lite, a client since December (see Ad Review on Page 59).

"[The ads have] generated more discussion than any ads we've had in a long time," said Barry Andrews, president of independent distributor Miller of Dallas. "Whether you like them or not, everyone is talking about them and that's created a real buzz down here."

For Burnett, Fallon's departure would appear to be a triumph. McDonald's isn't expected to seek another agency, which means Burnett will continue as lead agency on Arch Deluxe.


Burrell Advertising, Chicago, McDonald's African-American agency, also could benefit from Fallon's absence. McDonald's recently tapped the agency for three general-market ads in support of a Chicken McNuggets promotion.

Some executives close to McDonald's said Burnett's relationship with the company has grown rocky, too, as same-store sales have languished. Others disputed that notion and said Burnett has been gaining favor at McDonald's suburban-Chicago headquarters.

Contributing: Bill McDowell, Pat Sloan

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