Online Extra: McDonald's Supersized Gains
Since 2004, when the movie Super Size Me spawned a backlash against fast food and the world's largest restaurant chain, McDonald's (MCD ) has staged a most impressive comeback. Thanks to a host of new, healthier menu items that have cleaned up its image and with sizable boosts in same-store sales, McDonald's stock is up more than 45% in the last 12 months alone. The company also gained in the BusinessWeek/Interbrand Best Global Brands ranking, climbing one rung to become the eighth most valuable brand on the list. So how is McDonald's managing its brand today? BusinessWeek Marketing Editor Burt Helm spoke with McDonald's Chief Marketing Officer Mary Dillon. Edited excerpts follow.
McDonald's has been a major global brand for decades. What's different in how you approach marketing today?
I'll start with what hasn't changed. You still have to start with really sharp customer insights. We operate in 118 countries and we need to be relevant in many different cultures, so we need to leverage and uncover insights to make them relevant. It's the question I ask myself every single day: What is the consumer opportunity or problem we're trying to solve?
What's different is that people's lives are getting busier and it's very easy for them to opt out. One of the things I challenge our marketing folks with is [to come up with] creative [work] that people really want to go back and watch. It's a very complex media world today. Everybody is living in a multiscreen world, from computers to television to cinema, and it's not a one-way street. We need to make our messaging more like a dialogue, and not a monologue.
What exactly do you mean by that? What's a dialogue when you're selling hamburgers?
I'll give you an example. We held something called the "global casting call." We gave a chance for average customers to be seen on our packaging. We just tried it as an experiment. We launched it on the Internet and used just word of mouth [to promote it]. The result? We had millions of hits on the Web sites; 13,000 people submitted an entry to be on our packaging—people who submitted a photo and a story of themselves. We selected 25, who are now on our packaging. We got a lot of buzz beyond that, too—[journalists] writing stories and people discussing the fact that average people were on McDonald's packaging.
Another example is that we just launched a digital platform for kids. We launched it as part of the Shrek promotion [earlier this year]. It really is a step-change in how we think about movies and promotions and how we think about marketing. We created a world for them to go online and have fun.
So packaging, special Web sites…Are you seeing your advertising mix changing?
We've reduced our reliance on traditional [TV campaigns] and increased on digital, for sure. Mass media is still alive and kicking.… It's a great way to generate awareness, and it's part of the broader mix. But as you get closer to point-of-purchase, I think the dialogue-type marketing is a good way to generate awareness.
How is this reflected in how you work with your advertising agencies?
Our expectations have changed. We need our agencies to come together as collaborators at the start of things. We work with a few different agencies, and they look at one another as competitors. Sometimes they work on different parts of the marketing mix [than their intended role] and that's a little tricky. But what matters is the idea has to be integrated from the start. It's not "let's create a 30-second commercial" and then try to use a version of that everywhere else. We need to bring together our marketing disciplines—traditional, PR, etc.—and connect them all together from the start around one big idea.