September 3, 2003

Big New Campaign for McDonald's

LL consumers be as ardent about the first coordinated worldwide campaign for McDonald's as the company, struggling to turn around its lagging sales and reputation, demonstrated itself to be yesterday?

Scores of executives of the McDonald's Corporation, based in Oak Brook, Ill., flew to Germany for a glossy introduction in a Munich nightclub of the campaign, part of a comprehensive, two-year marketing plan covering 119 countries. McDonald's spends about $1.5 billion a year on advertising to stand out in the very competitive fast-food market, about half that in the United States.

The campaign wears its heart on its sleeve as evidenced by the customer-centric theme, "I'm lovin' it," which is expressed in commercials with a jingle to be sung in many markets by the pop idol Justin Timberlake. The goal of the campaign, which begins overseas now and in the home American market on Sept. 29, is to rekindle the flagging desire of consumers — particularly children, teenagers and younger adults — to visit McDonald's restaurants and order mainstay menu items.

"McDonald's has been flailing for years because it's having trouble getting a handle on an authentic story for the company at a time when customers are looking for authenticity," said David Altschul, president at Character, a consulting company in Portland, Ore., that specializes in creating and reviving brand characters. He contrasted the McDonald's brand character, Ronald McDonald, whom he labeled "a superficial clown," with Dave Thomas, the late founder of Wendy's International, who still resonates with consumers as a genuine fan of the food he sold.

The McDonald's campaign is to extend far beyond television, radio, print, outdoor and interactive advertising to include events and promotions meant to surprise consumers as well as help remake the experience inside the stores. The last is a realm McDonald's has for too long ignored, according to James R. Cantalupo, named chief executive in January in a management shake-up. He acknowledged that leaders of the company, as he has put it, "took our eyes off the fries." The nonadvertising elements of the campaign are to range from retraining employees to redesigning packaging to refocusing on clean restrooms.

"What we are launching here is a radically new approach by McDonald's" that is "more than just another advertising idea," Larry Light, global chief marketing officer at McDonald's, said in a telephone interview from Munich after the campaign presentation.

"Consumers will hear, see, feel our new attitude," he promised, "in our marketing and in our restaurants."

The campaign is drawing mixed reviews initially. There is praise for the elements that seek to be contemporary, like the "I'm lovin' it" jingle, in a musical vein that the company calls "hip-pop," and the signing of the popular and energetic Mr. Timberlake to an estimated $6 million endorsement deal.

But there is also concern that McDonald's may be, well, biting off more than its customers can chew in its eagerness to build on recent sales gains — the first in almost two years — for products like entree salads and pancake-style breakfast sandwiches.

"The best analogy I have is the old vaudeville act of the guy who spins plates on sticks," said Dennis Lombardi, executive vice president at Technomic, a food-service consulting company in Chicago. "Getting any one stick with any one plate to spin doesn't do it."

To reignite the once formidable McDonald's sales machine, Mr. Lombardi said, "it's not in the end about the advertising, it's about the customer experience in the store."

"The success of the campaign will truly be based on how McDonald's can convert trials to increased repeat visits," he added, referring to the curious younger consumers who may be drawn in by the more modern aspects of the ads. "I've had clients I've told, `Be grateful you're not advertising; all it would do is increase your rate of rejection.' "

One question McDonald's is eager to have answered is the rejection or approval rate for the new theme, which replaces a year-old version of a theme, "We love to see you smile," introduced in June 2000.

"I'm lovin' it" is intended as an upbeat expression that a meal at McDonald's "is one of the simplest pleasures of daily life," said Jürgen Knauss, chief executive at the McDonald's roster agency that developed the slogan, Heye & Partner in the Munich suburb of Unterhaching, part of the DDB Worldwide division of the Omnicom Group.

Will "I'm lovin' it" be another memorable hit like "You deserve a break today" or another forgettable flop like "Food, folks and fun" or "What you want is what you get"?

" `I'm lovin' it' sounds a little self-centered and its use of the present tense suggests immediacy, not expectation," said Timothy R. V. Foster, the founder and self-described chief slogan maven at AdSlogans Unlimited, a consultant in London.

By contrast, Mr. Foster said, his favorite theme for the chain was "Did somebody say (pause) McDonald's?" because "it held out anticipation and excitement about a very positive idea for the brand. The unspoken thought it led to was: `Great idea! Let's go.' "

Still, Mr. Foster said, he is pleased the company is dropping "Smile" and its longer variant because they "had nothing to do with the brand" and "could have been for Colgate, United Airlines, Disneyland or Hertz."

There was also praise for the musical elements of the campaign from Susan Nunziata, executive editor at Entertainment Marketing Letter in New York, an industry newsletter published by EPM Communications.

By signing Mr. Timberlake, "McDonald's seems to be doing it the right way," Ms. Nunziata said, because he is "a rising star who's still rising," especially with the youthful target audience for the campaign.

She compared the Timberlake endorsement with disappointing results recently suffered by the Chrysler Group division of DaimlerChrysler in hiring the singer Celine Dion.

"It has to be believable," Ms. Nunziata said. "You can't picture Celine driving in a — I forgot the name of the vehicle." (No wonder, so did most car buyers; it was the Pacifica.)

The introduction of the campaign came after McDonald's uncharacteristically sought to build anticipation with a series of teaser events and announcements. The hoopla ranged from a beauty pageant among its agencies to develop the new theme, which was won by Heye & Partner, to the appointment of Ronald McDonald to the fanciful corporate post of chief happiness officer.

"There was a lot of foreplay about this campaign," Mr. Light said, laughing. "I certainly had the concern that there was so much buzz, so much noise, of our own creation, would it live up to expectations?"

"We've really raised the bar," he added. "But to those who ask, `Can you do it all?' we say, `Of course we can and of course we will.' "

Mr. Light pointed as prelude to the strong sales gains in the second quarter in the American market, lifted by the new salads and McGriddles sandwiches as well as an updated pitch for the flagship Big Mac. The improvements came after the company's first-ever quarterly loss, in the fourth quarter of 2002, though sales in Europe remain flat.

"We've created positive momentum and this will continue it," Mr. Light said. "And there are many more changes to come."