McDonald’s choses their ad agency based on creativity, not price

Posted on Posted in How to Guide for Marketers

This week, McDonald’s named longtime Nike ad agency Wieden+Kennedy, as its lead creative shop in the United States. I hope this means we might be moving into a new era, as we leave what I think is our worst decade in the 120 years of marketing. 

Three years ago, McDonald’s made the news for their consolidation of all their agencies into one, with an $800 Million price tag that went to Omnicom. The contract was very unique for the ad agency world, as they put a significant bonus linked with the overall sales impact. That is a very uncommon agreement for the ad agency relationship and as a marketer, it is something I don’t like.

I miss great advertising work

I yearn for great work. 

Three years ago feels like a long time ago. Back then, too many marketing minds wanted to rip costs out of the system. Zero based budgeting. Cut ad agency fees. Bring ad agencies in-house. Focus all work on transactional advertising that drives immediate sales. As someone who spent 20 years on the brand side, I had some doubts McDonald’s linking the agency’s compensation to sales might focus the advertising too much on the short-term. 

My hope is this can be a turning point and partner with ad agencies to create great creative work

We need it. 

McDonald’s should be seen as one of the industry leaders in producing great work that inspires the rest of us. I miss the simply beautiful tagline of “I’m loving it.” There was the Michael vs Larry Bird, with the “nothing but net” Super Bowl ad. I can’t get “Two all beef patties…” out of my head. And, I crave more Ronald McDonald versus The Hamburgler moments. However, I just can’t remember any McDonald’s ad in the last 3 years.

Work with your ad agency to invest in your brand, consumers will come

I see the role of a brand is to create a tight bond with your consumers, that will lead to a power and profit beyond what the product alone could ever achieve. The problem is that when you just become a short-term sales machine, then who is building the brand?

As a brand, the danger of a performance-based fees is that 100% of your advertising will shift to a fixation on short-term transactional ads.

We need ad agencies to challenge us to build a pent-up desire for our brand, with messaging that adds a touch of magic that will make consumers love us. If you are after profit, I believe the tighter the bond you generate with your most cherished consumers, the more power, growth and profit your brand will realize. Marketing research experts suggest the right balance between brand-building and transactional advertising should be a 60/40 split that favours building your brand first.

Let me use the analogy of the jar we keep at our front door, where we put our loose coins. Brand building is like adding a few coins for when you need it, whereas transactional ads are like taking a few coins from the jar. If all you do is trigger sales transactions, eventually you will have no coins left in the jar. Same for your brand. 

If all you do is keep telling consumers to buy your brand now, eventually they will forget why they should ever buy your brand.

As a client, I once came out of an ad agency pitch, awarding the business to who I thought was the best agency, but coincidently the ad agency was also the lowest price bid. By a significant amount. It’s been many years, so I can say this candidly. I told them, “You were the lowest bid. I will give you the business on one condition. Move your fees up to the next lowest bid, and put that investment into getting great people on my business.” I believe agencies should make a fair profit on your brand. 

If you think it is expensive to hire great people, you should see how expensive it is when you hire bad people. 

Your ad agency can help you build emotion into advertising directly impacts a brand’s persuasion score

While brand leaders are always trying to find a winning claim, there is proof of a correlation between the feel-good emotions you create with both consumer persuasion scores and overall brand appeal scores.

Milward Brown advertising research finds a direct correlation between how involved consumers are in the ads with the degree of the positive emotional feelings your advertising evokes in consumers. The chart shows that as the feelings go from low to medium to high, the scores for both persuasion and brand appeal also go up.

Let's work with ad agencies to return to great work

Brand leaders need to take a step back and let the creativity of execution unfold. I always say that it is okay to know exactly what you want, but you should never know until the moment you see it. As the client, I like to think of advertising as the perfect gift that you never thought to buy yourself. How we engage our experts can either inspire greatness or crush the spirit of creativity. From my experience, experts would prefer to be pushed than held back. The last thing experts want is to be asked for their expertise, and then told exactly what to do. There is a fine line between rolling up your sleeves to work alongside the experts and pushing the experts out of the way.

With advertising, brand leaders do the opposite of what they should do. 

You role should be to control the strategy. Yet you give too much freedom that it confuses everyone. You should give more freedom on the final execution, yet you try to control the creative outcome that it stifles the creativity. I remember one time, after briefing in the agency creative team, my senior account director started to ask me what type of ad I envisioned. I paused, shocked by the request for my prescriptive solution, and said “I have no idea, and I like it that way.” Two weeks later, we saw work that won an Effie. 

We hire ad agencies to take us on a ride to an unknown place, to make great work we could never have imagined ourselves.

It is time to step back and assume your true role as a brand leader. It is a unique skill to be able to inspire, challenge, question, direct and decide, without any expertise at all. 

Our brand training program will teach your team how to make smarter decisions on creative advertising

Beloved Brands is the playbook for how to build brands that consumers will love

Learn how brand leaders should think, define, plan, execute and analyze

  • You will find strategic thinking models and examples for each of the four strategic thinking methods, looking at core strength, competitive, consumer, and situational strategies. 
  • To define the brand, I will provide a tool for writing a brand positioning statement as well as a consumer profile and a consumer benefits ladder. I have created lists of potential functional and emotional benefits to kickstart your thinking on brand positioning. We explore the step-by-step process to come up with your brand idea and bring it all together with a tool for writing the ideal brand concept. 
  • For brand plans, I provide formats for a long-range brand strategy roadmap and the annual brand plan with definitions for each planning element. From there, I show how to build a brand execution plan that includes the creative brief, innovation process, and sales plan. I provide tools for how to create a brand calendar, and specific project plans. 
  • To grow your brand, I show how to make smart decisions on marketing execution around creative advertising and media choices. When it comes time for the analytics, 
  • I provide all the analytical tools you need to write a deep-dive business review, looking at the marketplace, consumer, channels, competitors and the brand. Write everything so that it is easy to follow and implement for your brand.

You will learn everything you need to know so you can run your brand. My brand promise is to help make you smarter so you can realize your full potential.

You can find Beloved Brands on Amazon, Kobo and Apple Books

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