Report from the AAAA Conference, New Orleans

MCDONALD'S SHIFTING ADS AWAY FROM TV TO DIGITAL

Marketing Chief Cites Increasing Emphasis on Internet

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NEW ORLEANS (AdAge.com) -- McDonald Corp.'s senior vice president of U.S. marketing, Bill Lamar Jr., drove another nail in the coffin of the 30-second commercial
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today when he said the fast-food giant would be doing less TV and shifting more of its advertising into digital media.

Not TV driven
Speaking at the 85th annual American Association of Advertising Agencies management conference here, Mr. Lamar said: "The days of spending hundreds of millions of dollars on TV advertising is over. Reaching consumers is no longer TV driven."

"We must have insight-driven ideas that connect us to individual consumers at the right time and in a place where that customer is most receptive to our message," he said. "For McDonald's that means less TV advertising is in our future."

Internet emphasis
Mr. Lamar underscored the firm's new focus of attention -- digital marketing -- saying that no other company is doing more to reach customers on the Internet than McDonald's. He cited the fast-food marketer's product-placement deal with online game The Sims, coupled with its agreement with Intel to offer wireless Internet access, as evidence of this change in focus.

"While today, most of what you'll see is TV advertising, if I stand in front of you six months from now, what you'll see will be materially different," he said.

Media fragmentation
Mr. Lamar's comments echo those of Coca-Cola Co.'s president and chief operating officer, Steven Heyer, who at length has argued against marketers' reliance on TV advertising and for more dollar-shifting between media. "And as media fragmentation continues ... and as new choices continue to emerge and technology leaps out ahead of consumers' wishes to change the way they behave ... it's incumbent upon us all ... to think differently about how we'll connect with consumers in the future," Mr. Heyer said in February.

Mr. Lamar opened his speech saying that perhaps the burger chain had not paid enough attention to the effectiveness of its advertising during the boom years. "We lost some of our focus. Loyalty for our brands has suffered. We haven't grown profits enough. We haven't been motivating our customers to visit us more often."

The marketing executive stressed that those days are over and that other marketing disciplines such as promotions would take greater prominence. He mentioned the company's promotional activities with the National Basketball Association and Nascar racing series as a way to connect with young males -- its major demographic target alongside women with children.

New agency mandate
Mr. Lamar said he has handed agencies a new mandate, to come up with new promotional and marketing ideas that would win awards, so long as they were delighting the customer.

Responding to a question about which competitor's marketing efforts he admired, Mr. Lamar responded, "Wendy's and Sonic Fast Food are doing a good job." He added that McDonald's now considers its competition the casual-dining industry at large, as opposed to simply the fast-food category.

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