McDonald’s Announces Major Change to Marketing Strategy

According to an internal memo published by McDonald’s U.S. customer experience officer Tariq Hassan and chief information officer Whitney McGinnis that was recently discovered by CNBC reporters, the fast-food giant is in the early stages of shifting funds away from lower-return traditional media marketing outlets like TV commercials and print, and, instead, making a major economic investment in digital media. 

As reported by CNBC, McDonald’s wants to invest hundreds of millions of dollars over the next several years to expand their digital presence by upgrading their MyMcDonald’s Rewards and its digital ordering channels to help bolster their e-commerce business as well as expand their overall digital marketing strategies. 

According to company executives, the strategy is expected to help modernize the company’s marketing strategy and widen its competitive advantage by moving them away from traditional, legacy marketing (which produces lower returns when compared to its digital counterparts) and help push the company’s global efforts toward digital-forward strategies. 

In order to successfully implement this wide-reaching strategy over the course of the next few years, executives plan to lean on operators to pay for the funding using their existing marketing contributions. 

In addition, by 2025, franchisees will be expected to contribute 1.2 percent of their expected identified digital sales – a rate that will be updated annually based on projections. 

So what’s in it for the franchisees? 

Early projections show a $2,600 increase in cash flow for every U.S. store starting in 2025. 

Discussing the change during the brand’s Q1 earnings call, CEO Chris Kempczinski said, “When we shift marketing investment from traditional mass media like television, print and billboard ads, to collective investment in modern and digital capabilities to personalize the experience, we drive profitability. And successfully delivering personalized experiences depends on transforming our restaurants to deliver what customers want, hot fresh orders delivered with convenience and accuracy.” 

Continuing, Kempczinski added, “Breakthrough campaigns, a great tasting menu, and personalized experiences will drive customers to McDonald’s again and again as they come through the physical doors of our restaurants and the digital door of our mobile app. And in this environment, with pressured [quick-service] traffic, we have an opportunity to get the customers who already visit to visit more often. As more customers make purchase decisions based on personalized recommendations on their phones, driving frequency means using our digital capabilities like loyalty to know when to serve our customers better than anyone else. With the insights powered by our loyalty members, we will work to deliver the right message at the right time to the right customer, encouraging those who already love McDonald’s to visit even more.” 

And, according to early earnings reports, this full on embracing of digital outlets seems to be working for the company as global Q1 year-over-year sales lifted 2 percent in 2024, marking the brand’s 13th straight quarter of positive comps. This includes the 30 percent growth previously reported over the past four years. 

… Focusing in on the U.S., same-store sales reported sales rose 2.5 percent thanks to, among other things, effective marketing campaigns and the continued expansion of the brand’s digital presence.