- In a major strategic shift, McDonald's hired the independent agency Wieden and Kennedy to run its US creative advertising as the fast-food chain tries to keep up with its buzzier rival Burger King.
- Wieden and Kennedy is best known as the lead agency for Nike, Bud Light, Old Spice, and Delta.
- In an internal memo at Wieden and Kennedy, agency leadership positioned the win as a victory for creativity over pure data, in a dig at bigger rivals.
- We Are Unlimited, an entity launched by the holding company Omnicom in 2016 to handle the McDonald's business, did not pitch for the business.
- In another first, McDonald's will also allow Wieden and Kennedy to continue serving as the agency of record for its rival KFC.
- Click here for more BI Prime stories.
McDonald's took a 180-degree strategic turn this month by choosing the independent agency Wieden and Kennedy to lead its creative-advertising business in the US after an extended review.
According to an internal memo that Wieden leadership sent out to all staff when the news went live on Friday afternoon, the win marked a repudiation of the biggest industry trend in recent years, in which agencies hyped their ability to use consumer data as the key factor in creating and targeting ads.
Read more: McDonald's bought an AI speech company to take the human interaction out of drive-thrus
In the memo, Colleen DeCourcy and Tom Blessington, the agency's copresidents, positioned the win as a victory for "the power of creativity," arguing that the quality of their team's creative concepts, in combination with "insight" and "intelligence" drawn from internal market research, beat out the numbers and algorithms presented by the Big Four holding company Omnicom.
McDonald's is the largest fast-food chain by revenue, but its marketing efforts have not earned the industry plaudits of rivals like Burger King, which scored the top prize at this summer's Cannes Lions Festival of Creativity for the "Whopper Detour" campaign that let customers buy a Whopper for one penny — but only if they visited a nearby McDonald's first.
Omnicom's stock price has fallen by about 3% since news of the loss went live on Friday.
McDonald's picked Nike's longtime agency in a pivot toward more focus on creative excellence
The Portland, Oregon-based Wieden and Kennedy is best-known as the agency behind Nike's ubiquitous 30-year-old "Just Do It" campaign, Old Spice's "The Man Your Man Could Smell Like," and, more recently, Bud Light's "Dilly Dilly."
Wieden and Kennedy defeated the Omnicom-owned competitors TBWA\Chiat\Day New York and Adam&eveDDB in a nine-month review that began as a pitch for a single project but evolved into a race to lead McDonald's ad business in the biggest fast-food market.
A sign of the significance of Wieden and Kennedy's win is that incumbent We Are Unlimited, a Chicago-based entity that Omnicom created to service the McDonald's account in 2016 after beating out its rival Publicis, was not involved in the pitch at all. We Are Unlimited is part of Omnicom's DDB Worldwide network, and DDB Worldwide CEO Wendy Clark and former McDonald's Chief Marketing Officer Deborah Wahl described it at its launch as the"agency of the future." We Are Unlimited promoted itself as having "digital and data at the heart" and included "embedded teams" from companies like Facebook, Google, Twitter, and Adobe working alongside its own employees.
In an uncharacteristically sharp rebuke to the competition, Wieden and Kennedy's memo said that We Are Unlimited has now been "relegated to an operational role" on the McDonald's business, though it will retain a small portion of the work it previously handled for the client.
Subsequently, Wieden and Kennedy provided a statement emphasizing the partnership between the two agencies. "We Are Unlimited is an important partner that brings deep expertise about the brand to the table, and we look forward to working closely with them," it read. "McDonalds' renewed commitment to the power of creativity is a testament to where the brand is headed. Being successful today requires a marriage between the human ways that creativity is able to evoke feelings and bring out the soul of a brand and the insights that lead to the brand's voice creativity will always be rooted in data and strategy."
"We remain a proud partner with McDonald's and are working closely across both the McDonald's and We Are Unlimited teams to ensure we remain focused on our shared goals and priorities," said a statement that a We Are Unlimited representative provided to Business Insider in response to the Wieden and Kennedy memo.
In a press release announcing the change, Morgan Flatley, McDonald's chief marketing officer and a former PepsiCo executive, thanked the team "for their work over the last three years supporting key moments in our transformation and operational excellence."
The chain also abandoned past policies in agreeing to share an agency partner with its rival KFC
According to sources with direct knowledge of the business, the final section of the memo, which is cut off in the version obtained by Business Insider, discussed how Wieden and Kennedy would manage an apparent conflict between McDonald's and another longtime fast-food client, KFC.
These sources said both companies agreed to allow Wieden and Kennedy to participate in the review — a significant strategic shift among fast-food brands. Traditionally, such companies forbade their agencies from working with direct competitors. To avoid overlap, one source said the two accounts would be strictly separated in different offices, with Wieden and Kennedy Portland handling KFC and Wieden and Kennedy New York working on McDonald's. Unspecified "IT safeguards" will also ensure that the brands' accounts do not conflict with one another.
McDonald's declined to comment beyond its own press release, and representatives for KFC and its parent company, Yum Brands, did not immediately respond to a request for comment.
According to the data-insights company Kantar Media, McDonald's spent $765 million on advertising in the US last year.
See the memo below.
SEE ALSO: Burger King's CMO explains why the biggest risk in marketing is not taking one
Join the conversation about this story »
NOW WATCH: Burger King's CMO explains why the biggest risk in marketing is not taking one