McDonald’s marketing engine has been on overdrive since Q2 2020, when CEO Chris Kempczinski said the company was going to leverage a $200 million “marketing war chest” to accelerate pandemic recovery and “get aggressive in going after share.”
The company has since given us Famous Meals, kicked off with Travis Scott, Cactus Plant Flea Market adult Happy Meals, and an organic response to the Grimace Shake Challenge. It’s produced McDonaldland character Crocs , a VIP McGold Card, a global FIFA World Cup campaign, and “The person who runs the McDonald’s account.”
This “war chest” has gotten us all talking, has kept McDonald’s top of mind for Gen Z consumers, and has generated traffic, sales and, according to executives, more market share indeed.
But there’s more to do and more to come. During the company’s investor day event last week, Jill McDonald, president of IOM (international operated markets) provided a peek at McDonald’s marketing playbook and what could potentially come from it.
“McDonald’s is elevating its marketing game and while we’re proud, we still have plenty of room to get even better,” she said. “The quality of marketing is still inconsistent across markets, and we have an opportunity to improve the consistency of executions.”
To do this, McDonald’s established the “One McDonald’s Way” initiative earlier this year, which includes a “horizontal” approach to everything from digital to creative. The company is also focused on maximizing its return on investment and implementing a “more personal approach to value,” which we wrote about here.
To execute against this playbook, the company is identifying what McDonald calls universal “fan truths,” such as fighting over the last fry at the bottom of the bag. These truths cross international and cultural boundaries and the company is aiming to scale these types of ideas more quickly than it’s done in the past.
“We’re now being more intentional about putting processes in place to set up singular ideas to drive massive global impact,” McDonald said.
We’ve already seen an example of this from the “Raise Your Arches” campaign released earlier this year in the UK market. The idea was simple – an invitation to grab McDonald’s for lunch is so universal, McDonald said, it can be extended without words; in this case, just by raising an eyebrow. The campaign was brought to more than 30 markets.
As for the ROI piece, the company has put into place new testing methodologies to measure and assess the impact of its creative work. In the U.S., McDonald said there has been a strong correlation to business outcomes, “far surpassing any tools used in the past.”
“This is helping marketers learn much more quickly what works so we can drive even higher ROI every single time,” she said.
More personalization is also expected to drive a higher ROI and McDonald’s is getting there through its loyalty program. Launched in 2021, the program now counts 150 million 90-day active users who collectively generate $20 billion in sales. The company expects this to increase to 250 million 90-day active members and $45 billion in annual sales by 2027. McDonald said these members visit with 15% more frequency and spend nearly twice as much on average than non-loyalty customers.
“Looking forward, we’ll continue to build a digital ecosystem and enhance our ability to more deeply connect with customers throughout their journey,” she said, including through personalized offers, exclusive swag and content, McDonald’s-themed gamified experiences, and more. That’s just the tip of the iceberg of what McDonald’s expects its marketing strategy to look like in the near future. Morgan Flatley, global chief marketing officer and head of new business ventures, provided even more hypotheticals during last week’s event.
“Take for example our loyalty program. In addition to earning and using points for food, imagine if we offered limited-time subscriptions to music or video streaming apps, exclusive merch to create a McDonald’s-themed birthday party, or first access to limited-edition sauces,” Flatley said. “This would bring in even more customers more often.”
Of course, more customers equal more data and insights for the company to deepen its engagement and it becomes a virtuous cycle.
“Not only will we be able to provide more personalized and convenient experiences that drive frequency, we’d also be able to future proof our marketing approach,” she said.
The future proofing comes from all of this being cookieless, which Flatley said is the future of marketing. It essentially means that digital marketing strategies won’t need to rely on cookies to track user behavior, but will rather use methods like fingerprinting, device recognition, or machine learning algorithms to target users.
“In this new world, we believe we are better equipped to reach millions of customers through the multiple channels we own. We can reach customers with the right message and the right offer at the right moment, creating much greater impact,” she said. “This is a tremendous competitive advantage that will increase the power of the billions of dollars we invest in paid media.”
The possibilities, she added, are endless. They could also extend to new ways to engage customers through both physical and digital channels. Flatley said, for instance, that McDonald’s is one of the world’s largest book and toy distributors through its Happy Meals.
“Imagine if we leveraged our Happy Meal brand equity to commission a book series that engages and inspires children through Happy Meal promotions. We could use physical restaurants to talk about the books, then use digital channels to distribute podcasts or audio versions of the books. We could even develop characters to develop programming that reaches millions of families via our app,” Flatley said.
Or, McDonald’s could create a murder-mystery series around Grimace, using screens in-store to tease the series and then host preview events.
“We could even invite fans to submit stories each month via the app with the best getting featured while earning rewards,” Flatley said. “Think about the level of engagement and sticky behavior we can bring to our business.”
More hypotheticals, sure, but certainly not out of the question – not for this brand. And so, we may have just gotten a peek at what’s next for McDonald’s: More personalization, more globally unified campaigns, more engagement, more ways to grow the business beyond the menu.
“This is just the starting point for where we’re going next, when we’re not just the largest restaurant company in the world, but when we’re the largest global omnichannel retailer that combines the power of brand, physical footprint and digital ecosystem to unlock the power of a world-class consumer platform,” Flatley said. “We’re truly at the start of something new.”
Contact Alicia Kelso at [email protected]