Inside McDonald’s

Two years ago, McDonald’s was in trouble. The keeper of one of the most recognized brands in the world was about to report the first quarterly loss in its 50-year history. And while new product offerings were in the pipeline, a scattered menu and mixed messages had stripped the brand of much of its meaning. “We lost relevance,” admits global chief marketing officer Larry Light. “The world had changed, and McDonald’s stood still. The whole character and personality of our offering was frozen in time.” Even stranger was that the company’s first global campaign, launched last fall with an intentionally vague tagline and catchy aural signature, could be the saving grace. This is how “I’m lovin’ it” became a hit.

The Brief
In February 2003, executives from McDonald’s 14 ad agencies in 10 countries gathered at client headquarters in Oak Brook, Ill., for the company’s first global agency summit. Light, a former brand consultant who had joined McDonald’s full time only six months before, had called the brain trust together to discuss the brand, which was coming off a tough year. Consumer research revealed the company’s offerings were perceived as “convenient and cheap,” Light says. “Those are the same reasons people pick service stations,” he says. “The majority of our heavy users, when asked what their preferred brand was, said that they didn’t prefer McDonald’s.”

Featuring presentations about target relevance from media outlets such as MTV and Lifetime, the summit aimed to discover how McDonald’s could reclaim its cachet. What the company needed, says Light, was a new mind-set. For years, its marketing had been mired in an “Age of We” attitude, which led to ad lines such as, “We do it all for you” and “We love to see you smile.” But times had changed. Individuality was what appealed to the younger consumer. By summit’s end, the agencies were charged with developing marketing against a two-word brief: “Forever young.”

The Pitches
Two months later, Light, along with then COO (now CEO) Charlie Bell and svp of global marketing Dean Barrett (and joined at times by in-house chief creative officer Marlena Peleo-Lazar), were flying around the world for presentations that involved top-to-bottom analyses of how “Forever young” would apply to local markets. For the agencies, it was a chance to impress. “Every agency looked at it as their opportunity to come up with [McDonald’s] global campaign,” says Bob Scarpelli, U.S. chief creative officer of DDB. The brief elicited myriad interpretations. DDB Chicago, for instance, presented a campaign themed, “Eat happy.” Leo Burnett played off the familiar “Billions and billions served” line with the theme, “One served.”

From the 14 presentations, one commonality emerged. “McDonald’s is unique in allowing people to be individuals and members of a community at the same time,” Light says. “All of [the presentations] expressed that thought.” The only thing left to do was determine which of the 14 ideas could work everywhere.

The Idea
It came from an unlikely place: Unterhaching, Germany. McDonald’s agency there, Heye & Partners, an Omnicom shop aligned with DDB, worked off DDB’s global strategy that McDonald’s was a fun place to be, and came up with the line, “Ich liebe es,” which translates to “I love it” (and became “I’m lovin’ it” in English-speaking markets). “The strategic thinking is that the visit to McDonald’s is the simplest pleasure,” says Jurgen Knauss, CEO of Heye, who had worked on the shop’s McDonald’s account for more than 30 years. “It’s a campaign with global and local appeal.”

Knauss and his shop presented a “modern look at the McDonald’s brand,” says Peleo-Lazar. Rather than present a finished campaign, Heye illustrated the idea with a video capturing the feel of the concept, as well as ideas for other media, such as outdoor.

From the outset, music played a key role. Early on, Heye enlisted German-based music house Mona Davis Music to come up with a new sound for McDonald’s. While the agency settled on hip-hop for the campaign’s initial voice, it showed how other genres could appeal to different markets. But as with most revelations, the biggest one came by chance. Mona Davis president Tom Batoy was working in the studio with a backup singer whose part consisted of five notes, “Ba da ba ba ba.” As she sang, Batoy suddenly realized he had found the new aural signature. “It comes so easily through your lips,” he says. “Everybody can remember it.”

The Production
In June, at the Chicago Sheraton, Knauss, Light, Barrett and Peleo-Lazar presented the campaign to 500 McDonald’s executives from around the world. Without boards or spots, the group mimicked Knauss’ presentation, albeit with an updated and more multicultural video. Under a mood of guarded optimism, a launch date of September was set.

While Heye had developed the vision and Knauss remained the primary agency-side decision maker, DDB Chicago was set to handle much of the execution, with creative director Tim Souers and executive producer Greg Lane playing key roles. In late June, at the International Advertising Festival in Cannes, the client and agencies interviewed more than a dozen directors. They picked James Brown, a Brit who had helmed spots for Nike and Coca-Cola, to oversee production of a pool of launch spots.

Brown sent 15 teams to film slice-of-life vignettes in a variety of styles in locations as far afield as Brazil, South Africa, Japan and New York City. The spots were meant to show McDonald’s as a fun part of daily life. Song lyrics included lines like, “I’m lovin’ it/This is the place to eat/I’m lovin’ it/Since I don’t work I just rock to the beat.” Images included a girl karate-kicking a shake out of a friend’s hand, a man “driving” his convertible as it’s towed away, and an impromptu street dance by a Japanese businessman. Many of the vignettes were planned; others were improvised. Someone would be seen eating a burger, fries or other McDonald’s food only now and then.

In all, five spots were pieced together targeting different segments, from young men to families. Set to a hip-hop tune, the ads were translated into 11 different languages, with some elements (such as an elderly European cross-dresser) tailored to individual markets.

The Launch
When Knauss pitched the idea to McDonald’s in May, it had one significant hole. “We presented the idea that this part of the music would be good if it could be played by someone who was known,” Knauss says. But he had no idea who. It was Barrett who suggested Justin Timberlake, the youthful pop star who would become the celebrity face of the launch.

Owing to varying media schedules and events worldwide, the campaign rolled out globally over a monthlong period, breaking in Germany first, at the beginning of September. According to Light, advance buzz led to a billion impressions of the advertising before the company ran paid media. Even by the launch time, though, not everyone was a true believer. Some agency executives admitted skepticism that the idea would work in all markets. “McDonald’s is at different parts of its lifestyle in different parts of the world,” Scarpelli says.

The solution was something Light dubs “freedom within a framework.” The idea is that every ad in every market shares elements such as the five tones, the font and the logo. But local agencies are encouraged to tailor the executions to fit their markets. Another key part of the campaign’s voice is something the company and agencies have dubbed the “I story,” in which the customer’s point of view is the only one expressed. “Everything we do should be a story about one person’s life and why they love McDonald’s,” says Paul Tilley, gcd at DDB Chicago, who leads creative on the shop’s U.S. McDonald’s business.

While many creatives initially bristled at the guidelines, they now say the restrictions provided a sense of freedom. If some things were off limits, everything else was fair game, including the soundtrack, which could jump genres from country to skate punk, as long as it contained the five notes at the end. Batoy estimates the number of musical variations around the world at more than 900.

For a time, much of the work mimicked the launch spots. But as 2004 arrived, agencies were encouraged to expand on the ideas. A pool of global spots from April varied in concept and tone. A spot from Burnett in Chicago expressed the inner thoughts of expectant mothers. A DDB Chicago spot touting the new Chicken Tenders humorously depicted an office drone’s paranoia that someone might steal his food. Another Burnett spot showed people using a crumpled McDonald’s bag to play an impromptu game of soccer in a mall. Musical styles have ranged from techno to rock to house to a subtle, lyric-free piano piece.

The Results
Despite the initial skepticism, the advertising has proved to be a hit. Executives say the five-note riff has worked its way into the popular culture, invoked by high-school marching bands and even a Detroit Pistons ticket taker, who was said to hum the notes upon seeing the Golden Arches on the shirt of McDonald’s chief marketing officer.

More important, global sales were up nearly 8 percent for the first three quarters of 2004, compared with the previous year, while U.S. sales were up more than 10 percent (assisted no doubt by successful new products like premium salads). Even analysts have praised McDonald’s vigor and renewed focus. “We believe the company’s significantly improved positioning should sustain one of the most powerful brand recoveries in recent history,” UBS analyst David Palmer wrote in a recent report. “Building a more intense relationship with core customer groups does not weaken the brand, it strengthens it.”

The Future
Originally conceived as a two-year marketing plan, Light now believes it may have a longer life. “It’s working so well, there’s no evidence we’ve maxed out,” he says. Though the company has continued to launch global spots from time to time, the local markets are free to adapt and run what they see fit.

To keep the idea fresh, Light is now promoting his concept of “brand journalism”—accepting that the brand means different things to different people in different cultures and allowing for even more freedom within the framework. “This is modern storytelling and a modern campaign,” says Peleo-Lazar. “Each chapter is quite different and unique.”

With that in mind, the company is scheduling another agency summit for February to discuss the future of the campaign, re-energize the troops and discuss how to keep the message fresh and relevant. “It’s a hard thing to be a brand that tried to surprise people,” says DDB’s Tilley. “What we don’t want to do is become some kind of Madonna who’s desperately trying to reinvent herself.”