Taco Bell's Breakfast Endorser: Ronald McDonald
Ronald McDonald loves Taco Bell's breakfast.
That's what Taco Bell is saying in its campaign introducing its biggest menu rollout to date. The Mexican food chain located a slew of actual Ronald McDonalds and got them to proclaim their love for the breakfast menu in its ads. And the fast feeder clearly isn't clowning around: Taco Bell says the marketing campaign will be the biggest in its 50-plus year history.
The TV spots central to the campaign are a blatant poke at McDonald's, the biggest player in breakfast by a wide margin, without an actual mention of the category kingpin. "It's not surprising these guys are loving Taco Bell's new Waffle Taco," says the voice-over in one ad. "What is surprising is who they are." Then the Ronald McDonalds introduce themselves.
The commercials were created by Interpublic's Deutsch, Los Angeles, and begin airing March 27. The spots include a disclaimer that the Ronald McDonalds in the spots are not affiliated with McDonald's Corp. in any way and were individually selected as paid endorsers of Taco Bell breakfast.
Taco Bell President Brian Niccol said the strategy is to turn heads and make the chain stand out in a sea of sameness. "This is about getting people to understand that there's a great alternative to their breakfast routine. There are lot of competitors [at breakfast]. Even the advertising all looks the same, and it's hard to distinguish one breakfast sandwich from another. We needed marketing that is not going to be taken as your ordinary breakfast-menu marketing."
He declined to detail how much the chain is spending on the push but noted that it will be bigger than its Doritos Locos Tacos launch. Taco Bell's parent company, Yum Brands, spent about $280.3 million on U.S. measured media in the first nine months of 2013, according to Kantar Media.
McDonald's did not return calls for comment by deadline.
Taco Bell will also be making the morning-show rounds, with appearances on shows like Fox and Friends. Other marketing tactics will include social media, which Taco Bell has invested heavily in, along with apps like Instagram. In the last week the chain has been promoting the launch in unorthodox ways; for example it sent 1,000 prepaid disposable phones to "fans" to go on "brand missions," asking them to post photos on Instagram or tweet posts related to Taco Bell and get rewarded various breakfast-related gifts. That phone promotion was created by Taco Bell and Publicis Groupe's DigitasLBi, the chain's digital agency. Interpublic's FCB handled in-store marketing and packaging.
The Ronald McDonalds spots will likely air for the next four weeks, with more coming later. Mr. Niccol said that the company will be marketing breakfast for the remainder of the year.
It's not all that common for brands to call competitors out directly in advertising -- so when they do, consumers take notice, said Derek Rucker, professor of marketing at Northwestern University's Kellogg School of Management. "The fact that they're making this aggressive play is likely to generate a lot of stir, especially on social media, so you can see their motivation," he said.
Mr. Rucker noted, however, that the success of the campaign will hinge on how it is received. "Instead of talking just about your brand, you're talking about two brands, and consumers can view calling a competitor out as everything from entertaining to inappropriate," he said. "It's a strategy that clearly has advantages."
Taco Bell has been testing breakfast since early 2012, and the rollout is certainly well-timed. Breakfast in 2013 logged its fourth consecutive year of growth for restaurants, while lunch and dinner continue to decline. In 2013, 12.5 billion breakfast visits (which accounts for about 21% of all restaurant visits in the U.S.), were made to U.S. foodservice outlets, up 3% from 2012. Lunch and dinner visits at restaurants declined 1% in 2013, according to NPD.
Fast food, which accounts for 80% of total restaurant morning meals, showed the strongest growth, with a 4% increase over the prior year. And the forecast looks good: NPD estimates that fast-food breakfast will grow a cumulative 9% over the next nine years. By comparison, the industry overall is expected to grow less than a half a percent each year for the next 10 years.
Because breakfast is the only area of growth for the restaurant industry, fast feeders like McDonald's, Dunkin' Donuts, Burger King and Subway have been ramping up their breakfast menus and marketing.
Analysts generally think that if Taco Bell's breakfast is successful, it could be a game-changer for the company. "They have a ton of potential for success," said Elizabeth Friend, analyst at Euromonitor. "Every chain has been trying breakfast, but Taco Bell has a strong brand and following, and they're riding the momentum from successful moves they've made in the last couple years."
Those successes are mostly from the Doritos Locos Tacos line of products, which Ms. Friend said will likely help the brand as it's introducing novelty items like the waffle taco, the highest-profile item on the breakfast menu. "They have a reputation for making crazy new items that might seem totally insane, but have proven they ultimately work."
Other products on Taco Bell's breakfast menu include the A.M. Crunchwrap; co-branded Cinnabon Delights; a breakfast burrito; the A.M. Grilled Taco; flatbread melt and hash browns. The chain has said that the the A.M. Crunchwrap -- eggs, steak, sausage or bacon, a hash brown and cheese all wrapped up in a tortilla -- is the signature item and will be the chain's equivalent to McDonald's Egg McMuffin.
Pricing for the products will run from $1 to about $2.49. Mr. Niccol said he expects the initial best sellers to be the A.M. Crunchwrap and the Waffle Taco.
Bonnie Riggs, restaurant-industry analyst at NPD Group, said that Taco Bell, aside from the differentiated menu, has working in its favor drive-thrus; thousands of points of distribution; a low price point and a target consumer group -- young people -- that are typically the heaviest users of fast-food breakfast.
Another advantage Taco Bell may have, said Ms. Riggs, is that the chain has said it will stay open for breakfast longer than other chains -- until 11 a.m. McDonald's, for instance, typically serves breakfast until 10:30, though it has in recent years experimented with a late-night breakfast menu and other types of extended breakfast hours.
Of course, the biggest questions are whether Taco Bell can sustain long-term breakfast success and whether it can lure customers away from McDonald's permanently. Breakfast is, after all, the most routine daypart for consumers, who rarely stray from their ritual. Taco Bell has "done everything it can to ensure immediate success," said Ms. Friend. "After that, it's up to the menu itself and their continuing marketing effort to keep that success going."
Mr. Niccol is optimistic that consumers will be "committed" to Taco Bell's breakfast. "We can break routines [because] we've got a better reward," he said.