Fallon splits with McDonald's

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Fallon McElligott, Minneapolis, parted ways with McDonald's Corp. last week after about a year on the fast-food giant's roster.

The announcement came three days after Holiday Inn pulled an ad by Fallon designed to launch a new $30 million branding campaign. The move showed how quickly even a hot agency can land in the hot seat.

Fallon, however, could get right back into the fast-food category. Domino's Pizza has invited the agency to pitch its $75 million account.


Domino's has hired Laurel Cutler as a consultant on the review; she served in the same capacity for United Airlines in a review that Fallon won last fall along with Y&R Advertising.

Mr. Fallon in a statement called the year with McDonald's "a rare professional privilege to represent one of the world's most brilliant brands."

But the relationship proved problematic. McDonald's had hired Fallon to handle the $75 million launch of its Arch Deluxe sandwich line. Last spring, Fallon produced a splashy, humor-filled campaign that targeted the sandwiches to "grownup tastes." Some reviewers pilloried the effort, aghast that McDonald's would risk alienating the youth market that represents its biggest competitive advantage.

"There's a real debate about whether it was appropriate to position this as an adult sandwich for a brand structure that is so invested in kids," said David Adelman, analyst for Dean Witter Reynolds.

After the launch, McDonald's sought more product-oriented advertising for Arch Deluxe, but Fallon declined, telling McDonald's it was a branding agency and not interested in product or pricing ads. McDonald's core agencies-- Leo Burnett USA and DDB Needham Worldwide, both Chicago--began to get Arch Deluxe assignments even as Fallon produced and aired a second round of humorous spots.

By November, Fallon's work was off the air, and the agency and McDonald's were going back and forth on what the agency should do next.

"Too many agencies make compromises and settle for mediocrity. We're not going to do that," said Mark Goldstein, president-integrated marketing at Fallon. "Brad Ball [McDonald's USA senior VP-marketing] has been understanding and terrific about this."

"Their future at McDonald's was very limited, and I think they saw that," said an executive with a rival agency. "Domino's is probably a bigger opportunity for them and a better one."

Mr. Goldstein said Fallon will continue to work on Holiday Inn, noting that more work in the "On the Way" campaign is in the pipeline.

Of the controversial launch ad, featuring a transsexual, he said, "We got a lot of publicity, and I think everybody who's talking about it knows that Holiday Inn has spent a billion dollars on renovations."

Reviews have also been mixed for Fallon's first ads for Miller Lite, a client since December.

"[The ads have] generated more discussion than any ads we've had in a long time," said Barry Andrews, president of independent distributor Miller of Dallas. "Whether you like them or not, everyone is talking about them and that's created a real buzz down here."

For Burnett, Fallon's departure would appear to be a triumph. McDonald's isn't expected to seek another agency, which means Burnett will continue as lead agency on Arch Deluxe, in addition to many other assignments.

Burrell Advertising, Chicago, McDonald's African-American agency, also could benefit from Fallon's absence. McDonald's recently tapped the agency for three general-market ads in support of a Chicken McNuggets promotion.

Some executives close to McDonald's said Burnett's relationship with the company has grown rocky, too, as same-store sales have languished. Others disputed that notion and said Burnett has been gaining favor at McDonald's suburban Chicago headquarters. Mr. Ball couldn't be reached for comment.

Contributing: Bill McDowell, Pat Sloan.

Copyright February 1997, Crain Communications Inc.

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