September 06, 2016

I'm Not Lovin' It

You don't have to be a marketing genius to figure out how this works.

McDonald's hires a new cmo, and then after the obligatory designated waiting period she names a new agency.

Who's surprised by that?

But there is some disturbing news in this story. What goes unsaid is that in addition to a new agency, the cmo gets the big prize every cmo secretly lusts after -- the opportunity to run her own ad agency.

Of course, it will never be said out loud, but have no doubt about it -- the de facto ceo of McDonald's new  custom-made "agency of the future" (someone shoot me) is McDonald's cmo.

As you've surely read by now, Omnicom is following the revolting new agency gimmick-du-jour and promising to create a new agency from scratch solely for McDonald's.

After costs, the agency's compensation will totally rely on meeting key performance indicators created by McDonald's. Anyone who's ever worked in an agency in which the entire agency is in the clutches of one client knows that the key-est of the KPIs is "kiss my ass or die."

I had the opportunity to do advertising work for McDonald's (on a regional basis) for over 15 years. Here's why this new system is a prescription for awful advertising:

1. Omnicom is not new to McDonald's. DDB Chicago (an Omnicom agency) has been arm-wrestling Publicis's Leo Burnett (the other finalist) for McDonald's business on and off for decades. Most of this infighting and maneuvering was never revealed to the press, but it's been an ongoing soap opera.

2. No one who's any good will want to work at this "agency of the future." First of all, "agency of the future" is the cliché of the decade. For years now, McDonald's has been the last stop on the advertising train. They once were one of America's great advertisers. Now they are among the worst. I am officially skeptical that great creative people are going to be lining up for jobs at McDonald's new in-house agency.

3. The agency will have full responsibility and virtually no authority. They will be held to "KPIs" over which they have little to no control.
  • They will have little to no control over the strategy. The strategy will be dictated by a combination of the McDonald's marketing department (don't ask) and a committee of franchisees (yes, it's everything you imagine.) The extent to which the agency's strategy will be executed is exactly the degree to which it mirrors the thinking of the corporation and the franchisees.
  • They will likewise have little to no control over the creative product. 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.
  • They will have little to no control over the field. McDonald's has about 20-40 field agencies in the US (I've lost track) who (when I was there) created about 50% of McDonald's advertising on a regional basis. These agencies are very busy keeping chronically dissatisfied franchisees in the corral. The new agency will make a grand tour and present their awesome Powerpoint to every franchisee group and field agency in the nation. The agencies will roll their eyes and do exactly what their local franchisee groups want.
  • Everything I've read from the cmo leads me to believe that she is auditioning for the job of grand marshal of the "more data/more digital" parade. This is the default mantra of every flat-tire cmo on the planet. Before McDonald's leadership falls for this horseshit, they might want to take a long, hard look at P&G's recent experience.
  • 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. 
So when you have full responsibility and no authority how do you demonstrate "performance?" Easy, don't argue with the boss.

The new agency is starting with two hands and several other major body parts tied behind its back. If they manage to create anything exceptional it will be a miracle, and they will have my eternal admiration.

(For an opposing view, read this from my good friend Mark Ritson.)

In other inter-global worldwide news...
Watch me shoot my mouth off about the evils of online tracking in this clip from TVNZ, in New Zealand.

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