McDonald's To Review Its $2 billion Global Media Buying Account

By Suzanne Vranica Features Dow Jones Newswires

Fast-food giant McDonald's Corp. is conducting a review of its massive ad buying account, as the company seeks to find more efficient ways to spend its advertising dollars around the globe.

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The burger chain, which hasn't done a formal media review in about 14 years, spends roughly $2 billion on media around the world annually, according to a person familiar with the matter.

"We are looking at ways to make our marketing dollars work harder, whether that be through more efficient media spending or finding more effective ways to connect with consumers," said Bob Rupczynski, McDonald's vice-president of global media and customer relationship management.

Omnicom Group Inc.'s OMD has handled McDonald's ad buying business for more than a decade in the U.S. and is also responsible for the work in most countries around the world.

McDonald's said its relationship with OMD remains "strong" and the agency will be participating in the review process. In 2016, McDonald's consolidated creative ad duties in the U.S. with Omnicom Group.

The Oak Brook-Ill. company has been making big changes to its approach to marketing. Earlier this year, it ended its longstanding partnership with the International Olympic Committee. The company has been increasing its use of digital marketing and technology. Its efforts have included offering mobile ordering and payments in many of its restaurants and rolling out a loyalty program.

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Those initiatives will enhance McDonald's ability to harness more customer data and use the information to do more targeted advertising. Those approaches can range from digital media opportunities to targeted TV ads to digital outdoor ads, Mr. Rupczynski added.

McDonald's hired Mr. Rupczynski earlier this year partly because of his experience in developing a data-led approach to advertising for companies such as Kraft Heinz Co.

As part of its ad review, McDonald's said it is moving away from a single global media agency and will instead select a small number of ad buying agencies to work with around the globe.

The decision to work with multiple agencies runs counter to the trend of marketers seeking to save on agency fees by consolidating ad buying duties at one agency.

"The goal of this is really not to drive down agency fees, the goal of this is to find what is the most efficient way to reach the consumer" and to "ensure best in class media services and capabilities" around the world, Mr. Rupczynski added.

Write to Suzanne Vranica at suzanne.vranica@wsj.com

(END) Dow Jones Newswires

October 26, 2017 13:04 ET (17:04 GMT)