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McDonald’s Expected to Pare Down List of Regional Agencies By Jim Kirk and Scott Hum

CHICAGO – McDonald’s Corp.’s commitment to pare its regional agency roster apparently is on an accelerated schedule with a goal

More than one McDonald’s insider said the fast-food giant, which has slowly whittled its agencies from 60 to around 30 subtly during the past decade, wants to have a short list of regional agencies to work with by the beginning of 1994. They cite efficiencies in coordinating national promotions and cost savings by having fewer agencies placing more local media dollars.
The push also is a function of McDonald’s recent shift to putting more money behind national promotions through one of its two national agencies, Leo Burnett Co. and DDB Needham Chicago.
While not confirming existence of a survivors list, McDonald’s senior evp/chief marketing officer Paul Schrage said the company has cut in half the number of local agencies from a peak of about 80 in 1986, but noted that ’10 agencies now account for more than 80%’ of local ad billings. The consolidation of agencies is similar to the consolidation McDonald’s has engineered with food and equipment suppliers, he said. ‘In this economic environment, you have to get the costs down, and it’s more efficient to work with fewer agencies.’
If McDonald’s has its way, between 10 and 12 of the company’s largest regional agencies would pick up substantially more business by the end of the year, according to sources. That list would most likely include Arnold Fortuna Lawner & Cabot/Boston; Davis Ball & Colombatto, L.A.; Fahlgren Martin/Parkersburg, Va.; Glennon Cos., St. Louis; Moroch & Associates/Dallas; and McCann-Erickson’s Universal Group, which handles the largest portion of local billings for McDonald’s.
Local agencies got a taste of what local reviews might be like last October when the $8-million Washington, D.C. co-op went into review and eight of McDonald’s shops were invited to pitch. McCann-Erickson eventually walked away with the business.
Copyright Adweek L.P. (1993)