McDonald's U.S. regions to get agency choices after OMD-only approach
To borrow a line from McDonald's, some U.S. franchisees just aren't "lovin' it" when it comes to working with the chain's media agency, OMD.
The Omnicom Group shop won an account handling media buying across the U.S. for local co-operative groups of McDonald's operators in 2017. OMD also does McDonald's buying at a national level.
But now, OMD is about to get some competition on the local business.
McDonald's is conducting a review for the local U.S. media business, Ad Age has learned. Following the review, McDonald's will allow local co-ops to choose from a variety of media agencies to work with.
The move toward a more flexible approach comes after numerous franchisees created and joined a National Owners Association last year, aiming to give operators who run the restaurants more of a voice in McDonald's business decisions.
It also follows some disappointment about the fast feeder's marketing strategy. Last year, McDonald's admitted that at times it had put too much emphasis on national campaigns rather than local ones. For example, it realized breakfast campaigns should be more of a local activity so regions can emphasize the right drinks or food depending on what sells better in each area.
It was not immediately clear how many agencies are part of the review. OMD and Publicis Groupe's Starcom are both in the running, people familiar with the situation told Ad Age.
"We continue to work closely with our franchisees and this effort is simply about offering additional local media buying flexibility to them so they may support their business and connect with customers as they see best," McDonald's said in a statement.
Before OMD won the local media buying work, regional co-ops hired their own media agencies, often having creative and media handled by the same shops. But that changed when McDonald's drastically reduced the number of co-ops and the number of agencies approved to work with them in 2017.
The selection process in some ways sounds similar to the one creative agencies went through in 2017 to win business with McDonald's U.S. co-ops. First, they sought approval by McDonald's on a corporate level, and then pitched themselves to win the local co-op accounts.
No changes have been made for the national U.S. account, which OMD retains.
McDonald's announced a global media review in October 2017 in a push to work with multiple partners rather than relying solely on OMD. OMD and Starcom have each been awarded media accounts for other countries as part of that global review. According to information from McDonald's and others, so far OMD has held on to Canada, China, Germany, the Baltics, the United Kingdom, Egypt and half of Latin America, while Starcom won France and the other half of Latin America.
OMD's parent company, Omnicom, is of course also home to McDonald's national creative shop, We Are Unlimited, which was formed in 2016. While Chicago-based Unlimited had been an agency dedicated to McDonald's work, it plans to soon begin seeking other clients. McDonald's U.S. also hired Omnicom's The Content Collective as its agency of record for entertainment and content marketing in March 2018.
McDonald's was the nation's 29th largest advertiser in 2017, according to the Ad Age Datacenter, with ad spending up 3.4 percent to nearly $1.51 billion. Nearly 80 percent of the 2017 budget went to TV ads, which include both national and local spots.
Contributing: Megan Graham