CHAPTER 8

McDonald’s (2003)

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Used with permission from the McDonald’s Corporation.

It may not have saved McDonald’s, but it sure helped it get is rhythm back … and they have been Lovin’ It ever since.

Eager to capitalize on a crumb of sales momentum after years of shortfalls, foul-ups and blunders, the McDonald’s Corporation is taking a new creative direction in its advertising and marketing, based on persuading fast-food fans to rekindle their onetime love affair with the struggling restaurateur. The ambitious effort by McDonald’s, described yesterday in a conference call with reporters, is encapsulated by a theme that will be introduced worldwide in the fall: “I’m lovin’ it.” The campaign will be the first in which the company commits itself to a comprehensive consolidated effort with a single idea shared globally, yet interpreted to suit local markets at the same time. The new theme of the campaign, scheduled to run at least two years, will replace the many slogans now seen and heard in 118 countries, including “Smile,” the exhortation aimed at Americans since last year. McDonald’s spends about $1.5 billion a year in advertising, about half of that in the United States. “The hope that consumers will soon resume singing “Can’t help lovin” that McDonald’s of mine,” as Oscar Hammerstein II might have phrased it, is a result of an unprecedented four-month beauty pageant among 14 agencies that work for McDonald’s in 10 major countries. They were asked to present creative concepts that could travel beyond their borders. The “I’m lovin’ it” idea was the brainchild of a German agency, Heye & Partner, part of the DDB Worldwide division of the Omnicom Group. Heye, based in Munich, has created campaigns for McDonald’s in Austria and Germany since 1971. Jürgen Knauss, chief executive at Heye, said: “The challenge was a tough one,” Mr. Knauss said. “A key insight was that a visit to McDonald’s is one of the simplest pleasures of everyday life.” As for his agency’s idea winning the McDonald’s beauty pageant, as it were, Mr. Knauss said, “I wouldn’t be honest if I didn’t say it was a great moment.”1

McDonald’s Corp.’s choice of a little-known German agency called Heye & Partner to lead its new worldwide ad campaign raised more than a few industry eyebrows. After all, Heye is only the fifteenth largest agency in Germany, an ad market that has long suffered a reputation for lacking creativity. One can still spark a lively debate among German ad executives by asking them whether humor is a useful tool in advertising. But led by Chief Executive Jurgen Knauss, an energetic 65-year-old pipe aficionado, Heye has doggedly worked to win the trust of McDonald’s. In Germany, Heye is so associated with the burger chain that people sometimes call it “the McDonald’s agency.” Even before the recent triumph, the ads created by Heye for Germany have proved to be some of McDonald’s most exportable. In one lighthearted spot, a man is stuck in a traffic jam and a kid in another car keeps making faces at him. For revenge, the man holds up his pack of McDonald’s fries and makes a show of eating them. The spot or variations of it ran in 34 other markets from Europe to Hong Kong (though not in the United States). “They have a track record for coming up with great ideas that can travel,” says Dean Barrett, global brand business officer for McDonald’s. That relationship paid off when Heye came up with the winning tagline, “I’m lovin’ it,” in a worldwide idea bake-off McDonald’s held among 14 agencies this year. McDonald’s will let each country decide whether to use “I’m lovin’ it” in English or the vernacular. When Chairman and CEO Jim Cantalupo took the reins of the world’s largest restaurant company, he blamed, in part, poor marketing for the doldrums, despite the fact that McDonald’s is one of the world’s biggest advertisers, spending hundreds of millions of dollars a year on the brand. A month later Mr. Cantalupo summoned its largest ad agencies, including those from Omnicom’s DDB Worldwide and Publicis Groupe SA’s Leo Burnett, to its headquarters in Oak Brook, IL, for a creative shoot-out. Heye, which is part of the DDB network, triumphed in June, when McDonald’s announced its winning tagline. “It’s more than a line,” says Charlie Bell, McDonald’s chief operating officer. “It’s a brand attitude”2

Ever since McDonald’s introduced “I’m lovin” it’ as its first global advertising theme last September, some people have wondered whether the message would fail, suggesting that anything from cold fries to sluggish service could undermine its authority. But yesterday, eight months into the “I’m lovin’ it” regime, McDonald’s executives described a new round of 13 commercials from agencies around the world in which the theme remains nothing but love. They described, too, a world in which the jingle that accompanies “I’m lovin’ it” springs forth from cellphones, wind chimes and sports arenas. “The phrase ‘I’m lovin’ it’ is becoming part of the language,” said Larry Light, executive vice president and global chief marketing officer at McDonald’s, based in Oak Brook, Ill. “The campaign, the attitude and all of our integrated marketing have helped dramatically.” Beyond traditional advertising, McDonald’s also hopes to build the five-note tune that accompanies “I’m lovin’ it” on television and radio into an “audio logo,” as Mr. Light put it.3

Bill Lamar was the Chief Marketing Officer at McDonald’s from 2002 to 2008 and began there in 1984. He worked at McDonald’s from March, 1984 to March, 2008. He currently in the President of WBAL, LLC a marketing consulting firm in Atlanta, Georgia. He has an MBA in Marketing from the Kellogg School of Management at Northwestern University and a Bachelor’s Degree in Political Science from the University of Illinois at Chicago. He currently resides in Atlanta, Georgia.

What was McDonald’s thinking back then?

Well, if you go back to that time period, we really had poor business results for several years. We made a change in management and began developing what came to be called in McDonald’s “The Plan to Win,” which basically focused in on how we were going to change our strategy, to be able to regain our leadership in the quick service restaurant business. I won’t spend a lot of time on “the plan to win,” but one major component of it was to truly focus on our customers’ needs and wants. We had a tendency in McDonald’s to focus internally, focus on what it was that we wanted to achieve, as opposed to what it was that the customer needed or wanted from us. Part and parcel of that in marketing was developing, a customer-centric, customer-focused marketing and communications plan. The CMO of the global organization was a gentleman named Larry Light. Understand McDonald’s structure. There was a global organization that oversaw four different geographic divisions around the world. And the division that I was responsible for in marketing, the United States, was the largest division. Larry and I worked well together and we both came to the point of view that obviously we needed to modernize and become more contemporary in our communications and organizations. As a result of that, Larry instituted a worldwide competition among all of our agencies. McDonald’s had over 80 agencies worldwide at the time many of whom were affiliated with two holding companies, Omnicom and Publicus. One of the Omnicon agencies, ultimately won. And that was Heye & Partners in Unterhaching Germany. Two young guys came up came up with the slogan, “I’m lovin’ it” and also decided to make the musical foundation of it hip hop. A pretty radical idea for a “family values” brand like McDonald’s in 2002. We narrowed down the ideas. At one point in the process there were over 40 ideas. We narrowed them down to 10. And “I’m lovin’ it” really resonated with us. And it resonated with us because it was simple. It was customer-focused; it was speaking from the customer’s perspective on McDonald’s. And the architecture of it was very modern. Also, the ability to use not only hip hop, but any musical genre around that slogan, was very appealing to us. So we chose it. And the agency, I think was a 10-person agency at the time, was shocked, as you might imagine. But it just goes to show you, ideas come from people and individuals, they don’t come from organizations and bureaucracies. And that was the origin of “I’m lovin’ it.” One of the important things we did, and this is really, I think, the area that you’re focusing on, was really work on what was going to make it memorable? And so there are two things that we look at in marketing on memorability, and both of them are mnemonics. You call one of them audio. I think of them as mnemonics. For McDonald’s the colors red and yellow are iconic to the McDonald’s brand; actually it’s yellow and red. And then we wanted to find an audio, oral, mnemonics as well. And that’s how dadadadada was developed. The science behind that you probably know better than I do. But the fact of the matter is, that sound, that mnemonic is very important. If you think about advertising and you think about the environments that advertising is in, often people aren’t listening or paying attention, even though the ad is running or visible. Whether it’s on their phone, on their television, on their watch, people’s attentions are often in other places. And so the more you can have something that signifies your brand and grabs their attention the more likelihood you have of being able to communicate whatever message is that you’re trying to communicate. And so that was the rationale for having as much focus as we did on a mnemonic like dadadadada.4

How did Justin Timberlake and Pharrell Williams become part of the strategy?

Well, we made music central to the idea and central to the campaign. And I will tell you that the selection of Justin Timberlake to be the talent for the initial rollout of the campaign was quite interesting. At that point in time, he was an up-and-comer. He hadn’t yet achieved the fame, he has today. I questioned using him, given that the music foundation fundamentally was hip-hop, and he was not a hip-hop artist. He was not even in the hip-hop genre. A gentleman named Steve Stoute recommended him. I sat and talked with Steve. He persuaded me Justin would work and we went forward. It turned out to be great. The music was central to every idea. I don’t even think we did a commercial in the first year or two that didn’t have a music bed. I could be wrong, but I doubt it. Music allowed us to be contemporary and also allowed us to be demographically targeted based on who we’re trying to reach. Up until that point, the average customer viewed the McDonald’s brand as trusted and friendly but actually, kind of old stodgy. We’d been around a long time and we weren’t viewed as being young or vibrant or contemporary; on the edge of what younger customers would find appealing. So music was very important in helping to change that perception. Also the visuals, the editing that we used with our commercials was also very important. It was quick, it was multiple visuals, multiple scenes, energetic music, but energetic music in every genre. The great thing about “I’m lovin’ it,” the music itself, is that it can be adopted to Country and Western. It can be adopted to Pop. It could be adopted today, to K-pop if you wanted it to.5

This was when Timberlake was going solo right?

Well, it was actually part of his marketing, if you will, because he was an up-and-comer and his label and his folks were pushing him to be a star. And so doing a McDonald’s commercial that was going to get as much exposure as this one was, was a win for him and a win for us. The campaign cost was over a billion dollars in the United States. I’ll tell you an interesting story. When I sat down and I talked with Steve Stoute about Timberlake. I was not a fan of Justin Timberlake being of our vocal talent. This was a hip-hop-based idea and Timberlake had no credibility in hip-hop. And so, I didn’t know Steve, at the time. I called a mutual friend and said, “tell me about this guy. I want to meet him.” And so he and I sat down and had a drink. And the first thing out of my mouth was “How the hell can you recommend Justin Timberlake to be the talent introducing our new campaign?” And it went from there; half an hour later he had me convinced. So thank goodness I figured out how to listen. In McDonald’s, the idea of having hip hop as the basis of a national campaign was not without controversy. McDonald’s USA is a compilation of owner operators, employees, and restaurant managers around the country and it reflects the different parts of the country. And in Wyoming or Alabama the folks weren’t as enthusiastic about hip-hop in those days, as the folks in New York or L.A.. Now the reality is, their children were loving it. And that’s where we were targeting and focusing; young adults. But we had more than a few conversations with Owners of McDonald’s around the country who had trepidation about our association with hip hop. Over the years, really in particularly the first two or three years, quite a number of different talents were used within the campaign. Actually, Justin was really the face of it for several months. And then his agreement was over and we moved on. but he helped us accomplish what we needed to accomplish, which was to get attention, start changing how people viewed the McDonald’s brand. And for us, the most important thing to make us younger. We did a lot of work around the brand positioning or brand essence of being “forever young.” The McDonald’s brand should be “forever young.” And we had that permeate, not just what we did marketing wise, but also brand wide, the change in restaurant architecture and building design, was based on that. So everything we did, we wanted it to feel young, contemporary, with the times, and that all came out of “I’m lovin it.”6

It seems like McDonald’s shares a similar sonic strategy as does another Atlanta corporation: Coca-Cola right?

Oh yeah, we are their largest customer. We have a great relationship. I’ll tell you a quick story. Up until about 10 years ago... McDonald’s and Coca-Cola go back to 1955. Up until about 10 years ago, there was never a written contract with Coca-Cola and McDonald’s, it was all on a handshake.7

Why are we all still so interested in this sonic logo?

Well, I think it’s several things. Number one, it’s simple and easy to remember, and it relates, it relates to the brand that it represents. Number two, we’d been relentless, I can’t speak as much lately, but we were relentless in communicating the “I’m lovin’ it” message. We spent billions of dollars, communicating that message. And we did it in compelling ways. We had some bombs, but by and large, we executed it pretty well. The third is it relates to the brand. It relates to how people use McDonald’s. Now it’s not an intense, “I’m lovin’ it.” It’s a fun, joyful kind that fits your every day “I’m lovin’ it.” Easy to say, good mnemonics around it, good execution of having it come to life, tactically.8

What does he think of when he hears it now?

Oh my goodness. It was so ubiquitous with me that I don’t even... to be honest, I don’t think much of anything. I’ve heard it so often, and know so much about it. I admire the folks who have continued to keep it modern, keep it fresh, keep it contemporary so that it still resonates with folks. And I think that’s the longevity of it, is that it’s a positioning and it’s a slogan that can be timeless, as long as the execution of it and the communication of it is current. And so, I look at it that way. And quite honestly, I still find myself surprised from time to time that it’s still there. Usually when new marketing people come in, they want to do their own thing. And, it says something to the strength of what the guys from Unterhaching Germany came up with that it’s still around.9

Anything that he would like to share with future CMOs?

I would just say a couple of things to them and wish them the best. First, it is about whoever your customer is. And if you’re the marketer, you are the customer’s advocate, you are the customer’s voice, not your voice, based on what you have learned about your customer. You’ve got to be that voice in your organization for your organization to have sustained success. That’d be the first thing. Second, I would say to them is, as a marketer, know your entire business model, not just what the communications and marketing aspects. Understand how your business makes a profit. Be knowledgeable about financial aspect of the business model. Understand how you recruit and retain great talent, Understand management principles. It’ll make you as a marketer, much stronger. It will add to your credibility and give you more leverage to achieve and get done, within your company. Don’t allow yourself to be pigeonholed as just the marketing guy or gal. People do that. And in most companies, that’s a pigeon hole that means they only come to you when they need sales or things are bad. Why can’t we get more customers in there? Fix our brands’ image. We need to do this. And you’re a miracle worker, and there aren’t very many miracles. So I would just say, make sure that you’re grounded in the totality of your business and that your peers and superiors recognize that. And it’ll make your marketing much stronger, because you’ll understand, much better what it is that you have, that a customer wants or conversely what you don’t have that the customer needs.10

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