McDonald’s is promising to more than double its U.S. investment in diverse-owned media companies, production shops and content creators by 2024. Over the next four years, it will increase its U.S. advertising spending with platforms owned by Black, Hispanic, Asian American, female and LGBTQ people from 4% to 10%.
Additionally, the world’s largest restaurant company will be forming multi-year partnerships with diverse-owned media entities.
“With this latest move, we’re taking action to advance diverse-owned companies across the marketing supply chain,” Morgan Flatley, chief marketing and digital customer experience officer, McDonald’s USA, said in a statement. "We’re using our resources to support these platforms and businesses. ... while creating deeper relationships with our diverse customers, crew and employees.”
Currently, McDonald’s has longstanding relationships with diverse-owned agencies including IW Group, Lopez Negrete, the Boden Agency and Burrell Communications, the last a partner for more than 50 years.
Spending with Black-owned media and production properties is set to increase from 2% to 5%. Additional investments will follow with segments including Hispanic, Asian American, women and LGBTQ-owned properties. McDonald's also plans to form an advisory board of external marketing and advertising experts to help identify and eliminate financial hurdles faced by diverse partners.
The moves being announced by McDonald's have support from the company's U.S. franchisee marketing committee.
“As a Black female entrepreneur, I am proud to be a part of McDonald’s continued effort to meet women and diverse-owned businesses where they are by providing much-needed resources to do business in an ever-evolving marketplace,” Vicki Chancellor, Chair, McDonald’s USA Franchisee Marketing Committee, said in a statement.
The investment news follows a series of announcements from McDonald's about strengthening its diversity efforts. In April, the company's global leadership team issued a statement about allyship, noting "while we have always been committed to diversity, equity and inclusion, we recognize that McDonald’s has both a business obligation and social responsibility to do more to make our world more equitable."
In February, McDonald's announced it would be tying 15% of executive bonuses to meeting diversity and inclusion goals. It also said it aimed to have 35% of its top U.S. leadership be from underrepresented groups by 2025. Last November, the company held its first Media Partner Summit, which brought together diverse-owned media companies with the goal of identifying mutually beneficial partnership opportunities.
In July of last year, the company broadly outlined a set of new diversity goals, which included boosting efforts to recruit diverse franchisees and auditing its ads to ensure they properly reflect “the needs of customers."
That said, McDonald’s has faced hurdles when it comes to diversity. In February, a Black franchise operator of 14 McDonald’s restaurants filed a racial discrimination lawsuit against the company, alleging the company steered him toward restaurants in lower-income, less profitable restaurants because of his race. That followed another lawsuit from September filed by more than 50 Black franchisees, who sued the corporation for similar circumstances, saying they were driven out of their businesses after allegedly being pushed by McDonald’s to open in crime-ridden locations, and that they didn’t receive the same aid extended to white franchisees. In January of 2020, two Black McDonald’s executives sued the company, alleging they were subject to a hostile work environment, were passed over for promotions and then “demoted” because of “pervasive” racial discrimination, according to a report by the Chicago Tribune.
McDonald’s announcement follows those of other major advertisers. In April, General Motors committed to dedicating 4% of its ad budget to Black-owned media by next year, promising to increase its spend to 8% by 2025. Verizon said it would spend at least 2% of its ad budget with Black-owned media this year. This week, Disney called on advertisers to make multicultural commitments part of their upfront deals. Earlier this month, Hyundai Motor America hired its first-ever African American marketing agency of record.
Agencies, too, are doubling down on their efforts to increase diversity in media spending. WPP-owned GroupM made a “2% pledge,” urging its clients to invest at least that much of their budgets in diverse-owned media, while IPG Mediabrands has committed to investing at least 5% in Black-owned media across its entire client roster by 2023.
This move also comes as Black-owned media executives, led by Byron Allen, have called on Madison Avenue to spend at least 2% of their ad budgets with Black-owned media during this year’s upfront negotiations, when billions of dollars are committed to media companies for the next fall season.