Lovin' McDonald's Back To Health

Perhaps no iconic brand is under the microscope more than McDonald’s, from its years of consistent growth to its more recent struggles. As is often the case when a brand is struggling, the focus can easily shift to a reactive crisis mode, forgetting some of the key lessons when McDonald’s was thriving just a few years ago.

But changing leadership, simplifying its menu operations, and ramping up the “lovin” may not be enough in this incredibly competitive, rapidly changing “eating” landscape. 

If we take a longer-term view of the past seven years through the eyes of customers, we can see some clear differences in good years vs. bad — especially in how effective McDonald’s adverting was vs. its competition.

Let’s look at a few key historical facts.

1. McDonalds spent an estimated $988 million in U.S. advertising in 2013 (Kantar Media) — or about a $2.7 million and a 5.2% increase vs. 2012, but same store sales deteriorated.



2. In contrast, just a few years earlier in 2011, McDonald’s was doing just fine, averaging almost 5% growth in same store sales. This sudden, dramatic shift can’t be only attributed to complex menus or shifting habits of U.S. consumers.

3. If we look at how motivated consumers are by McDonald’s ads – there has been a dramatic change. In 2011, 41% of McDonald’s TV ads were significantly above competition in motivation metrics. In 2012 and 2013, when growth began slowing dramatically, only 4% of McDonalds ads were above average vs. competition.

4. Why the huge drop in on-air ad effectiveness vs. competition? Increasingly from 2012 onward, the main message consumers took away became fuzzy. While that clearly wasn’t McDonald’s intent,  it was, according to our study, how their customers received their ads. Meanwhile, competitive ad effectiveness surged past McDonalds, better communicating taste, health, value or new product offerings.

We’ve seen similar patterns in all sorts of big brands from banking to yogurt, and they reinforce four valuable lessons:

Messaging to customers still really matters. What you say, how you say it, and how strong it is vs. competition all matter tremendously. 

Ad effectiveness has as much, or higher, correlation to sales impact than media weights. Even amid budget cuts and media fragmentation, this holds true. Just four years ago, Tempur-Pedic had a 90% share of the super premium mattress market and was spending upwards of $100 million in consumer marketing. Serta launched iComfort with a very modest media spend of under $20 million annually, but a strong concept and in-store execution and quickly put a huge dent into Tempur-Pedic approaching monopoly status.

The strength of your advertising vs. the competition (not just vs. a category norm) needs to be measured objectively. While you may test your own advertising, do you also objectively evaluate key competitors? Do you use overall and relative ad effectiveness as part of any marketing mix modeling or is it more driven by spending? Investing millions in media analysis, product testing, big data analytics, tracking, innovation efforts and segmentation studies, may be wasted if you don’t measure how effective or competitive your communications are.

Stay on top of trends, but don’t lose the connection to your brand’s story. While some brands, like Chick-fil-A, can masterfully keep a brilliant campaign up to date, many brands struggle to stretch their brands just enough to keep their messaging and image fresh, but still connect with what their customers have grown to know and love them for. It is critical to consistently look at both what key messages are relevant, as well as how to execute them across your marketing mix to keep the brand story powerful and fresh.

As much as you may need to fix your house internally, never forget that at the end of the day, it’s how you connect to customers that will keep you ahead of the competition. While McDonald’s campaign revamping its “Lovin’” tagline may be enough to get consumers talking, what, exactly will they be talking about? Value? Healthier Menus? Unfortunately, it still seems less than clear, but if they can at least be less than ambiguous than competitors, perhaps things can start turning around.

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