McDonald's Hopes to Increase Effectiveness of Its Advertising

DES MOINES, Iowa -- Even with one of the loudest voices on the planet, McDonald's Corp. believes it can do a better job of making itself heard.

The fast-food company, which spends an estimated $1 billion or so on media annually, admitted Monday that in some ways it has become a victim of its size -- unable to accurately quantify just how effective all that money is in reaching consumers.

"We don't believe we were getting our money's worth out of our media," the company's chief marketing officer, Larry Light, said in explaining why it is reorganizing how it buys broadcast, print and other megaphones to disseminate its commercial messages world-wide. "We didn't have a system for quantifying what we were spending and what we are getting" for it.

Over the next year, that is likely to change. McDonald's will consolidate its media buying, relying even more on the agency that already has most of that business, the OMD Worldwide division of Omnicom Group Inc. As a result, several other agencies will either be dropped or have their portions decreased.

Saving money isn't the primary goal, Mr. Light said. Spending it more efficiently is. While he wouldn't quantify the consolidation's financial impact, he said, "Our expectation is to take that savings and reinvest most of it in improving the productivity of our media."

"We're not trying to see how much we can cut in our advertising. We're looking to be the most powerful voice in advertising, to be more effective," Mr. Light said. The executive, who took over McDonald's marketing machine more than a year ago, said he found the media-buying apparatus decentralized and inefficient.

Mr. Light also said the company's recent decision to go with a single marketing message for McDonald's around the globe -- "I'm lovin' it" -- already is paying off with higher sales.

Since its launch in September, the campaign and attendant products and promotions have increased average daily transactions in the company's 13,000 U.S. restaurants by about 650,000, Mr. Light said.

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