McDonald’s SG puts marketing on hold: Will it lose a seat at the dinner table?

 

McDonald’s closure in Singapore left many of us avid fast-food consumers and fans in dismay. The news of its closure until 4 May 2020 came over the weekend (19 April 2020), after several of its employees tested positive for COVID-19. Unfortunately for the brand, the closure comes a week ahead of Ramadan when the brand has typically won praise for its advertising.

Some of its heartfelt work include last year's ad revolving around the theme of "superhero" mothers. Titled, "My Ibu, My Hero", the campaign celebrated the spirit of Ramadan - a time of appreciation, thankfulness and bonding. Tying in with Mother's Day, the spot highlighted "superhero" mothers who during this Ramadan season, take the "extra effort" to prepare and provide for their families. 

Meanwhile in 2018, it created an ad that featured a Muslim McDelivery driver as the protagonist and chronicled his day from from waking up early to have his first meal with the family before dawn, to carrying out acts of kindness along the way during his deliveries. 

A spokesperson from McDonald’s also told Marketing that during this period, the brand will not be investing on any advertising paid or organic. “Our marketing promotional activities (including social) will be on hold while we suspend all restaurant operations,” he added. When probed further on agency remuneration, he added that the brand would continue to honour all work done by its creative and media agencies. McDonald’s agencies DDB, Leo Burnett and OMD did not respond to Marketing’s queries on the campaigns planned or contract details it has with the F&B giant.

In a conversation with Marketing, former McDonald’s and P&G marketer Dominique Touchaud said that while he has only the utmost respect for the brand having worked in McDonald’s France in the past, the decision to go silent on the marketing front is somewhat a “surprise and disappointment”. Currently, Touchaud runs his own firm SHOKUNIN that offers marketing as a service for Asia-based brand teams. 

“McDonald's is staffed with brilliant people who know what they are doing and more often than not, get it right if one looks at their business and advertising success,” he said. Touchaud, being also part of the P&G fraternity for 17 years, was in the camp which believes the marketing tap during a crisis, should not be tightened. Citing P&G’s choice to doubling down its marketing efforts during this pandemic, he explained that companies that can maintain some share of voice during a crisis generally fare better. Therefore, one should only cut advertising as a last resort. And whilst the cut in ad expenditure can be expected of some small local businesses, it should not ideally be the case for McDonald’s.

One should only cut advertising as a last resort.

Given that McDonald’s in Singapore is part of the social fabric, from students gathering to work on school homework to late night party goers stepping in for a mean, he added the brand should maintain a line of communication in one way or another. “McDonald’s needs to show that it cares about people even when they stop being customers. I am absolutely not implying that McDonald’s doesn’t. But by deciding to remain silent will question the seat that it has earned at a family table, which may have consequences when it decides to come back,” he added.

 “McDonald's will be there when the crisis is over. And we will go back to the restaurants because it has products people want. While nobody knows how things will turn out, I believe going silent will make it more challenging for it to take a societal stand as a brand, and be able to claim an emphatic and family like role in its marketing,” Touchaud explained.

Former J&J marketer and currently CEO of Jolt Digital, Sebastien Lepez, echoed similar sentiments as Touchaud, that the move to stop all forms of advertising now would not be the best one now, and this is the time that McDonald’s needs advertising the most in order to maintain the powerful relationship it has built with its consumers over the years.

Stopping the media budget now might result in drop in share of voice – which can subsequently lead to drop in market share. All of these will result in a longer recovery time.

“The brand now needs to talk to their customers, support them in this tough time and maintain top of mind,” he said, adding that if the messaging is sincere and supportive of customers, it wouldn’t be crucified on social media.

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Hold back campaigns

On the other end of the spectrum, Christina Lim, former CMO of honestbee and currently the founder of TheChrisSpeak, was of the view that every marketing dollar today, needs to be measurable in sales. As such, there is no point for paid marketing when the sales channels are not in operation. While there may be big budget media commitment or creative work developed to run in this period, unfortunately, these need to be put on ice, or repurposed for future use if applicable. Lim added: " There is nothing worse than delivering wrong messages at the wrong time."

There is no point for paid marketing when the sales channels are not in operation.

Having said that, she does however think the brand needs to remain visible and build trust in the midst of crisis, instead of going completely silent. This could be done through organic posts on its owned medium such as social media, apps, customer hotline and its owned audience. Tonality of communications during this time should show empathy and solidarity in line with the COVID-19 situation so as to reverse any lingering negative COVID-19 sentiment consumers might have. The brand now needs to demonstrate its efforts around taking care of their employees, disinfecting their stores and facilities, as well as improving their customer experience.

Anindya Dasgupta, formerly Fonterra's global head of consumer business and chief marketing and sales officer, and currently running his own consultancy Growth Officers Inc added that given the shutdown is for a relatively short period, the brand shouldn’t be spending through its nose right now. “McDonald’s would be better off redeploying those monies and increasing their planned spend when they reopen. The only thing that it can do now is to generate goodwill around the brand by creating a social responsibility story around the shut down,” he added.

Touching on agency remuneration for possible campaigns that have already been created, he added, most brands would be going through similar issues.

For large companies, their annual deals with the media houses will ensure that none of the parties are really affected through this.

Most likely, committed dollars will just be rescheduled to spend once the outlets reopen. While the brand might have spent some marketing dollars on creating campaigns around Ramadan but if the campaign is relatively generic in nature (i.e  not directly related to 2020 and any specific happening in 2020), it can use the same collateral in the future, with perhaps some minor modifications. In the case that it cannot, these are part and parcel of unforeseen events that inevitably impacts brands and companies from time to time. So in the worst case situation, even if this is a write off, it shouldn't make a big impact on the global McDonald's P&L, Dasgupta explained.

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