Flipping a change for the better
McDonald’s CEO finally gets the marketing spin right for beleaguered brand with the promise of greater community engagement
Last year was a tough one for many of the world’s biggest brands. Familiar fare ranging from presidential candidates named Bush to Kraft American cheese slices fell out of favour. Spicier offerings such as Sriracha hot sauce and Donald Trump were all the rage.
But, as the new year arrived, one member of the US corporate elite was demonstrating that is possible for a well-known - and frequently disparaged - brand name to regain its marketing mojo in fairly short order.
McDonald’s is on a stock market roll, months after it appeared to be the Fortune 500 equivalent of toast. Shares in the restaurant chain have rallied by roughly a third since their lows in January 2015, when the company named Steve Easterbrook to replace Don Thompson as chief executive. McDonald’s same-store sales in the US rose - 0.9 per cent - in the third quarter for the first time in a couple of years.
When Easterbrook, a 48-year-old native of Watford in England, grabbed the company reins, it was easy to see McDonald’s as being on the wrong side of history. Younger consumers are opting for healthier food and new burger chains, such as New York celebrity chef Danny Meyer’s Shake Shack, have appeared on the scene to offer consumers chopped meat that actually tastes like something that came from a cow.
What fascinates me about Easterbrook is that he responded to these travails with the corporate equivalent of political correctness. He didn’t argue with his company’s critics or mock the millennials. He tried to engage them.
Tieless and with the straightest of C-suite faces, Easterbrook appeared on video to describe McDonald’s as a “modern progressive burger company” that would “be more progressive around our social purpose in order to deepen our relationships with communities on the issues that matter to them”.
Granted, this pronouncement was kind of vague. But so was Ronald Reagan’s verdict that it was “morning in America again” or Barack Obama’s “yes, we can” slogan. The key point is that as a marketer, Easterbrook opted to go with the new-age socio-political flow.
McDonald’s pledged that by 2017 its US restaurants would only use chickens that are “not raised with antibiotics important in human medicine”. In Germany, it trotted out its first 100 per cent organic beef burger, using meat sourced from farms that eschew synthetic chemical fertilisers and pesticides.
To be sure, many of his innovations have been little more than variations on the old business axiom that holds the customer is always right. Easterbrook is giving the people what they want, such as all-day breakfast in the US, a splendid innovation in the view of this reporter, who has not willingly eaten a McDonald’s burger since the days when colour television still seemed novel, but doesn’t mind an Egg McMuffin or a cup of McDonald’s coffee at a pinch (they do keep it hot, don’t they?).
What’s new is that Easterbrook is adjusting to the new communications landscape facing even the wealthiest corporations and the most well funded politicians. Long gone are the days when leading advertisers could control their “narrative” by bombarding the public with 30-second television commercials. Instead, they have to figure out ways to join the “national conversation”, as it is known in the advertising game.
The order of the day is to lead from behind, as it were, and jump into the dialogue unfolding on social media when it suits a marketer’s purposes. A well-timed press release or tweet in this context can be just as meaningful as the most artful advertisement. Indeed, Easterbrook’s “modern progressive burger company” formulation recalls one of the great marketing campaigns in McDonald’s history.
Devised by Keith Reinhard, most recently of the DDB advertising agency, it was meant to assure the growing number of working mothers in the US of the 1970s that it was okay to take their kids out for a fast-food meal. “You deserve a break today,” went the celebrated jingle.
By casting himself as a progressive burger flipper, Easterbrook is also taking a page out of the playbook of one of today’s most successful consumer companies: Starbucks. When it comes to corporate dogooders, there is no one quite like its chief executive, Howard Schultz. So political has his persona become that it has seemed at times as if he were auditioning for a role as a stunt double for Bernie Sanders, the socialist Vermont senator running for the Democratic presidential nomination.
The apotheosis came last year when Schultz told his employees to write the words “race together” on beverages in the hope of stimulating conversations on US race relations. The Twitterati responded with derision, which was understandable, because sometimes people go to Starbucks for the coffee.
Lost in all the online snark was the fact that Schultz’s share price was also climbing rapidly. His shares have been trading recently around 50 per cent above their levels at the start of last year. Maybe that’s just a coincidence. But maybe it’s more than that. Maybe executives such as Schultz and Easterbrook are showing us all how successful capitalists behave nowadays.