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By Published on .

McDonald's Corp. will devote the bulk of its $600 million annual ad budget to the much-anticipated Campaign 55-price discounting wrapped in a new brand theme.

The effort broke April 4 with a 55-cent Egg McMuffin and national TV spots bearing the tagline "My McDonald's," from Leo Burnett USA, Chicago.


Brad Ball, McDonald's senior VP-marketing, USA, said the fast-food leader has planned its marketing calendar around Campaign 55 well into 1998, with a rotating roster of sandwiches to be featured at that price when purchased as part of a meal.

He said the ads, which feature McDonald's franchisees and restaurant crew members, express the values of the company from the year it was founded, 1955.

"This is not in the least a price promotion," said Mr. Ball.

An earlier memo to franchisees, however, said that between the breakfast ads and the 55-cent Big Mac ads breaking April 25 will be a flight of "national price-point advertising" beginning April 11.

"These ads will preview the 'My McDonald's' campaign with an emphasis on the great meal prices at McDonald's," including $2.99 Extra Value Meals and $1.99 Hamburger Happy Meals, the memo said.

McDonald's is advising franchisees to increase on-hand packaging and food supplies by 10% to 15%, suggesting the marketer expects "Campaign 55" to spur a similar rise in sales.

Year to date, same-store sales for the chain were down in 1996, but ticked up 1.5% in February over the same month a year earlier, according to Janice Meyer, an analyst with Donaldson, Lufkin & Jenrette.

Archrival Burger King Corp.'s product-focused ads helped that chain report same-store sales gains of 2.6% for the year ended Sept. 30.


Burger King said its marketing strategy won't change despite McDonald's heavy pricing messages.

"We've attached ourselves to a strategy that states it's not a great value if it's not a great-tasting burger," said Andy Bonaparte, BK's director of advertising.

McDonald's franchisees, who have long grumbled about price cutting and were counting on last year's introduction of the premium-price Arch Deluxe sandwich line to lift sales and profits, are taking a wait-and-see attitude about Campaign 55, according to restaurant analyst Allan Hickok of Piper Jaffray.

NatWest Securities' Damon Brundage said, "I don't think it's a viable long-term solution to the problem they have in the U.S., which is a product problem."


McDonald's Mr. Ball said Campaign 55 will be an integral part of the chain's summer tie-ins to Walt Disney Co.'s animated "Hercules" in June and live-action "George of the Jungle" in July.

Burger King begins an adult-targeted tie-in with "Jurassic Park: The Lost World" Memorial Day weekend, with ads from Ammirati Puris Lintas, New York.

At the same time, a BK promotion aimed at children will feature Kids Meal toys

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