The media response was dramatic, prompting hundreds of international headlines and leaving management in headquarters surprised and red-faced. But despite the brief embarrassment, "The key thing was that it was a temporary move to establish the validity of the arches, and it worked better than any of us expected in terms of building newsworthiness," says Kay Napier, chief marketing officer for McDonald's Europe, putting her own positive spin on the issue.
THE U.K. HIATUS from "I'm Lovin' It" hasn't been McDonald's only Euro-headache; in fact, it served to underscore the challenges McDonald's faces in turning around sales in some of its European markets. McDonald's has pointed to high unemployment and low consumer confidence in Germany and marketing missteps in France and the U.K. for relatively weak same-store sales growth in Europe.
Ms. Napier is confident the European market will improve as McDonald's launches its Salads Plus and value menus. "We totally have it within our power to get Europe growing," she says.
Restaurant analyst Andy Barish of Banc of America Securities sees the Europe problem as an economic issue. "I don't think it's anything worse than that," he says. "It's obviously something they can't control in Germany [where consumer spending] is very weak. That shows up in the informal eating-out market, which has been down a couple of years ... so they're going to go back and do some things they've done successfully here and in the U.K."
A list of McDonald's larger agency partners
DDB Worldwide (O), 34 countries, including U.S., Germany, Australia/New Zealand, Hong Kong, Scandinavia; Leo Burnett Worldwide (P), 29 countries, including U.S., China; TBWA Worldwide (O), France, Brazil, Greece, Spain, Argentina, Ireland, Switzerland; Cossette Communications Marketing - Canada; Tribal DDB (O), digital marketing in U.S., Australia, Germany; Del Rivero Messianu DDB (O), Hispanic; Burrell Communications Group (P), African-American
PR, product placement and other specialties
PR: Golin-Harris (Interpublic Group of Cos.). Promotions: JSH&A; Burson-Marsteller (WPP Group); Arc/Frankel (P); The Marketing Store Worldwide (Havi Group), U.S. and U.K.; GMR Marketing (O); Creata Promotion, Australia and Hong Kong; Creative Artists Agency; UPP Marketing; Davie-Brown (O)
Source: Advertising Age and McDonald's. Note: O=Omnicom Group-owned or supported, P=Publicis Groupe-owned or supported.