Commentary
This Ad Man Thinks The 'Agency of the Future' Omnicom Created For McDonald's Is Now Doomed For Failure
- by Richard Whitman , Columnist, September 6, 2016
The illustrious and ever-sharp Bob Hoffman has spoken. If you don't know who Bob Hoffman is, then you don't really work in the advertising industry. That, or you have not steeped
yourself in the wisdom of this man. Hoffman has had a long career in advertising including 15 years working on the McDonald's account. He is quick to point out that it was "just" regional work, but,
clearly he has a history with the brand.
In a recent blog post, Hoffman has a few things to say about the new McDonald's CMO and the creation of Omnicom's "agency of the future" created specifically to handle the McDonald's account, which Omnicom recently wrested from Publicis. Hoffman thinks Omnicom's "agency of the future" is a failure waiting to happen along the lines of Dell's Enfatico -- which, as we all all know, was an unmitigated disaster.
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Hoffman lays out three points as to why he feels the whole thing is a non-starter. Chiefly, he thinks the agency will have full responsibility but zero authority and control when it comes to success metrics. In other words, the agency can do all it wants, but it will have no control over how what it does is measured.
Hoffman holds no optimism for Omnicom and writes: "They will create idea after idea and all will eventually wind up in the McHomogenizer and come out as price/item promotions. Maybe they'll be allowed an 8-week honeymoon at which they'll introduce a new campaign, but after 8 weeks the campaign will just devolve into a tagline on price-item spots."
Furthermore, he adds: “No national advertising plan at McDonald's ever gets approved without a positive vote of the franchisees. If you've never presented advertising plans to a ballroom full of franchisees you simply haven't lived. Further, under this scenario, the agency is perfectly positioned for the delegation of blame. They will have no authority over either pricing or operations. McDonald's sales performance is far more related to prices and operations than anything the agency does.”
Sounds like a scenario most of you would like to avoid, right?
As Mr. Hoffman points out, this “Agency of the Future” may, indeed, not work. But so what? Omnicom will likely see its profits enhanced because it won this account, and McDonald’s business almost certainly won’t be any worse off for having changed agencies.
It should be noted that even if Omnicom has no control over how its performance will be measured, no agency really does. Typical arrangements allow clients to boot its agency on 90-days notice for any or even no reason.
Competition at the low end of the restaurant industry hinges on deals and pricing. It always has and likely always will. (Does anyone go to McD’s for the dining experience?) Pretty much every competitor has trained consumers to expect this.
The franchisee hurdle may well be insurmountable, but, given that an agency’s real job is to make ads that help the client’s business prosper (not to make award-winning snippets of cinematography) it makes some sense that the folks closest to the cash register have some say in what goes on.
In short, Omnicom will be better off for having won this business, and McDonald’s is likely to be no worse off.
The problem here is the relationship between Corporate (McDonald's) and the franchisees. Add into this volatile mix, the agency. It's an us (franchisees) vs. them (corporate). Until this relationship is solved, no one can really succeed especially the agency, which is why everything ends up being a price and item drive, so that the franchisees will meet the corporate goals. What we need is Captain Kirk to solve this Kobayahi Maru of a mess.
Excellent point, Patty. While Omnicom will work mainly on the national ad campaign for McDonalds, ultimately it's the franchisees, which are usually organized by individual market groups, who do a good deal of the local advertising and promotions using the national ads as a vehicle to exploit. I assume that Omnicom's deal involves advising the locals but will McDonalds' coprpoate folks be able to keep the franchisees in line and orchestrate their efforts for the common good? Will they listen to Omnicom and its corporate client? If some do and some don't will the deal be adjusted so the agency shares in the added sales only for those who cooperate and improve their sales performance? Lots of questions to be answered---I assume that Omnicom, which has had a great deal of prior experience with franchisees, dealers, etc. understood what problems might arise and negotiated some self protection in its deal with McDonalds.
Having helped McDonald's architect the Agency of The Future, commented on in this article, I've been fascinated by the comments about it. If you look to the future it requires change. Change needs creativity, bravery, flexibility, and tenacity. McDonald's and Omnicom have shown all four traits in creating a new model agency for the future. They should be applauded. Surely, the whole ad industry needs to pioneer and break new ground, not stick in the past? But, I guess it is human nature that pioneers often get criticised. Maybe let's wait and see the results before judging eh Bob?
Cronisar. Measurement McDonald's uses (used) for their buys. No one knew what that was including others in the agency or franchisees. Disenfranchisement.