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As it works to regain its footing, McDonald's Corp. will boost overall ad spending in 1998 and double the number of local promotional opportunities to bring the brand closer to consumers.

Brad Ball, senior VP-marketing for the burger giant, said there will be a "significant increase this coming year" in spending but declined to say by how much.

Last year, McDonald's spent $600 million in measured media, nearly twice that of archrival Burger King Corp. McDonald's spent $387 million through the first eight months of 1997, according to Competitive Media Reporting.

"There will be a lot of activity at the local level and there will be a lot of activity at the national level," Mr. Ball said.


For the past year, McDonald's has had three time windows out of about 12 to 15 during which local markets could feature their own promotions rather than national efforts. For 1998, the number of local windows will double in what one local agency executive called the "return of the local dollar" to the McDonald's system.

The move to more local promotions is part of the company's realignment last summer of its U.S. structure into five operating regions, each with its own marketing team.

"It goes to the fundamental reason for the realignment of the U.S. company: getting operators as close to the decision impact as possible," Mr. Ball said.

The change will mean more work for the nearly 30 local agencies that work with McDonald's, Mr. Ball said.

"It will be very positive for local agency relationships," he said. "It will allow them the opportunity to provide additional creative executions and promotional and tactical executions."

Mr. Ball said no reviews of those accounts are expected.

Local McDonald's agencies include Arnold Communications, Boston; Moroch & Associates, Dallas; Fahlgren, Dublin, Ohio; and Mr. Ball's former shop, DavisElen Advertising, Los Angeles, the former Davis, Ball & Colombatto.

The local efforts will be required to dovetail with the company's new national campaign from DDB Needham Worldwide, Chicago, tagged "Did somebody say McDonald's?"


Mr. Ball said McDonald's so far is "very pleased" with response to the new campaign, which was launched in October. Mr. Ball said that while he didn't want to hype results, during its first 30 days, the advertising had the highest recall of any McDonald's campaign in the past five years.

Thomas Conway, senior VP-marketing for the Television Bureau of Advertising, which has lobbied McDonald's and other fast-food chains to spend more on local marketing, praised the new strategy.

"It sends a signal to the franchisees that they have been a major reason for McDonald's past successes and will be important for their future growth," he said. "It is definitely a step in the right direction."


The boost represents another step toward local marketing that began more than a year ago. That was when franchisees voted to reverse an ill-fated year-old strategy, dubbed Operation Mac Attack, that had shifted the majority of ad funds to national media.

"We're going to have much more of what I would call effective, on each local basis, communications," said Bob Faller, president of FKQ Advertising, Clearwater, Fla., a local agency for some 160 McDonald's restaurants. "The communications will be targeted to the local market conditions and to the competition."

McDonald's has some 13,000 restaurants in the U.S., with about 85% of the system operated by franchisees.


The fast-feeder has been undergoing some high-profile struggles this year, including last spring's short-lived "Campaign 55" discounting program that was quickly pulled from stores.

For the first nine months of 1997, McDonald's posted flat operating income in the U.S., with a dip of 2% in the third quarter ended Sept. 30 over the same period a year ago.

The company warned Wall Street of continuing soft sales for the current quarter.

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