The nation's No. 1 restaurant chain throws its weight around in the form of a $425 million-plus advertising budget and a promotional spending war chest that netted the company a 10-year exclusivity tie-in deal with Walt Disney Co.
One individual behind that power is Brad Ball, senior VP-marketing USA at McDonald's, the heir apparent to David Green, worldwide senior VP-marketing.
It's no coincidence that McDonald's began to shake up its advertising in 1995, the same year Mr. Ball joined McDonald's. The biggest shift occurred when the company went outside its normal stable of agencies to assign the $75 million Arch Deluxe burger business to Fallon McElligott, Minneapolis.
Although no one knows for certain, Mr. Ball has been said to be planning to shift some business among McDonald's agencies to symbolically punish national agency Leo Burnett USA, Chicago, for a $20 million-plus shortfall in media buying last year. What is for sure is the overall impression that Mr. Ball is giving McDonald's shops: that no assignment is a sure thing.
Another sign that it was no longer business-as-usual was McDonald's linkup with Disney for a 10-year exclusive deal with their movie, home video and other properties. Giving the deal even more impact was the fact that it was snatched from rival Burger King Corp.
Burger King, however, hardly sat still for all the leader's actions.
Guided by Paul Clayton, exec VP-worldwide marketing, the chain fought back against Arch Deluxe with a smartly targeted ad campaign. Set to familiar tunes such as "Still the One," the TV spots show scenes of a Whopper being built. Superimposed on the screen are the words: "McDonald's may try and romance you with a new burger. But there's nothing like an old flame."
"We were looking for ways to more emotionally connect with consumers and be more relevant," says Mr. Clayton, who put BK's $250 million budget to work on the new advertising that plays off the long-running theme, "Get your burger's worth."
The strategy worked, at least initially-BK franchisees reported traffic up 11% while McDonald's Arch Deluxe blitz was on. It couldn't be learned if that trend continued through the summer.
Some analysts and observers, however, say they believe Arch Deluxe wasn't so much a competitive strike against BK as it was against Wendy's International.
In fact, although Wendy's ad budget, at an estimated $165 million, pales in comparison to McDonald's, its ad strategy featuring founder Dave Thomas and overseen by Exec VP-Marketing Charlie Rath, 60, is envied by rivals.
Mr. Rath says the reasoning behind the advertising is very simple.
"We're outspent with a boxcar of dollars" by McDonald's and BK, he says. "And the competition is giving away free this and free that."
So to stand out in the crowd, the No. 5 restaurant chain (behind McDonald's, BK, Pizza Hut and Taco Bell, according to consultancy Technomic Inc.) needed a standout idea and spokesman, which it found in the folksy Mr. Thomas.
"Maybe it's not the highest-decibel spot out there but it registers with people as a working-man's campaign," says Mr. Rath.
Not only that, but the advertising campaign is in its eighth year and Mr. Thomas has created 500 spots, making it probably the most consistent in the category.