McDonald’s takes a bite of retail media with new ad network

McDonald’s is entering the retail media race, piloting a new advertising network that will allow brands to reach customers across its app, kiosks, digital menu boards and restaurants.

The McDonald’s Media Network is currently being tested across 450 company-owned restaurants in the US, with the fast-food giant aiming to build it into a US$1 billion business across its system over time.

The network is being developed as a new revenue stream for McDonald’s and its franchisees, with global CMO and head of new business ventures Morgan Flatley describing it as the first example of how the company plans to create new value from its customer and media assets.

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“Commerce media is one of the fastest-growing areas in advertising and is expected to reach more than US$100 billion in the US alone by 2028,” Flatley said during McDonald’s Investor Day on 23 September.

“We are at the beginning of our aspiration to build McDonald’s Media Network into a billion-dollar business across the McDonald’s system over time," she added. 

The network builds on McDonald’s existing customer relationships and owned media footprint. The company has more than 70 million daily customers globally and nearly 220 million 90-day active loyalty customers across 70 markets.

McDonald’s has also been expanding the technology and data infrastructure behind those relationships. Its digital foundation brings together ordering, marketing, loyalty and data, while its single enterprise data foundation and common technology platforms operate across more than 46,000 restaurants.

Flatley said the company has an “unmatched footprint from our app to kiosks, menu boards, and restaurants” and is identifying ways to leverage those assets to create new sources of value.

The company’s loyalty programme is a key part of that ecosystem. McDonald’s said its nearly 220 million active loyalty customers have grown 45% over the past three years, with active loyalty members visiting 2.5 times as often as non-members.

The company is also looking to deepen those relationships through personalised offers, rewards and experiences. Its next phase includes a tiered loyalty programme for frequent customers, more personalised engagement for casual customers and new partner benefits, including Uber ride credits and Disney+ subscriptions in the US.

Alongside its customer data and loyalty capabilities, McDonald’s is also looking to make its marketing more efficient. Flatley said the company plans to focus on fewer, larger campaigns designed to be amplified by fans and creators, while increasing investment in longer-running programmes focused on its brand, taste, quality and value.

The company’s approach is underpinned by a broader shift towards direct customer relationships. McDonald’s said its marketing model will combine large-scale campaigns with more personalised interactions, using customer intelligence to drive frequency and engagement.

The company has not yet detailed the full advertising formats, pricing model or plans for expansion beyond the current US pilot.

McDonald’s has also been building out its digital and data capabilities for several years. In the US, the company appointed Starcom as its lead national media agency in 2021, bringing paid media, owned digital channels, customer data analytics and digital marketing under a more integrated model.

In Asia, its regional digital marketing function spans the McDonald’s app, loyalty, CRM, delivery, data and insights, personalisation, media and digital customer engagement across 12 markets.

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