In his keynote speech at last week's AdWatch: Outlook 2004 conference, Larry Light, McDonald's global chief marketing officer, did not mince words, pronouncing "the days of mass media marketing are over." McDonald's-with its $1.2 billion global marketing budget-has thrown out the rule book and is starting over.
It has ditched traditional brand-positioning marketing and embraced a new approach Mr. Light called variously "brand journalism," or creating a "brand chronicle" that seeks to tell as many different stories in as many different ways as it takes to reach McDonald's 47 million consumers in 119 countries. Each communication addresses one facet of the brand, Mr. Light explained.
"This is the end of brand positioning as we know it," Mr. Light said. "If you believe small is beautiful, then adopt the view of one brand, one product, one position."
Mr. Light railed against the "positionistas," who maintain brands have to have one single identity that appeals to an increasingly fragmented audience of consumers. "Identifying one brand positioning, communicating it in a repetitive manner, is old-fashioned, out-of-date, out-of-touch brand communication," he said. "A brand is multidimensional. No one communication, no one message can tell a whole brand story." He compared it to distilled water-OK to drink, but with no flavor.
"Distilled, simplistic marketing is brand suicide," he said. By contrast, the brand chronicle approach has resulted in 86% advertising awareness in McDonald's top 10 markets, as well as increased sales and a new excitement around the brand among both consumers and employees, he said.
The fast-feeder's "I'm Lovin' It" campaign has reinvented a brand that had lost its way, he said. In the process, McDonald's has challenged marketing conventional wisdom. "There's no question there's some discomfort," Mr. Light said. "On the client side or on the agency side, change is uncomfortable, but success breeds success."
McDonald's has made more use of its agencies around the world, rather than the traditional approach of having the office closest to headquarters take the lead in creating campaigns. McDonald's reviewed ideas from around the world before settling on "I'm Lovin' It," which came from DDB's Heye & Partner, Hunterhaching, Germany.
When McDonald's threw open the competition to all its shops, many were skeptical, but the Germans' success has inspired shops around the world to compete, said Mr. Light. All creative is handled on a global basis, but local shops can tailor it to their markets. He cited a global spot-which featured a multicultural cast kicking a wadded-up McDonald's bag around a mall, soccer-style-that includes green-screen segments where shops can insert local touches.
The chain will also look to promote those assets that are "uniquely McDonald's," he said, such as the Big Mac and Ronald McDonald. The Big Mac, until its latest push, had not been advertised without a price discount for 11 years. After recent Big Mac branding spots aired, the chain saw a significant lift in sales. The lesson? "Don't cheapen your icons," he said.
Ronald McDonald will also be used more. "We're letting Ronald McDonald out of the playpen prison. Look for him in some surprising places," Mr. Light said.
The media mix has also been upended. Rather than spend two-thirds of the U.S. media buy on prime-time network TV, McDonald's now spends one-third there and Mr. Light launched an open call to media companies to come up with ideas for the rest. McDonald's will find the money to execute them, even if they are not on the year's marketing budget, he said.
"It makes it harder [to budget], but if a great idea comes, you've got to do it," Mr. Light said. "The idea that I'm going to have all the great ideas before November of this year doesn't work."
McDonald's is set to move into the branded-entertainment business in a major way. Mr. Light said he was having discussions with unnamed broadcast networks and cable stations, such as Discovery Networks, about how they can work more closely on programming-related initiatives. Discovery is working on an unspecified project that would provide McDonald's with creative support.
He refused to say how much McDonald's was prepared to spend on such branded projects, but indicated the company has a separate budget.
"It's about the big idea," he said: "We're looking at anything that will bring us closer to our objectives."
contributing: claire atkinson