In Depth
Why McDonald’s Has Adopted A New Approach To Sponsorship Activation
Developments in digital technology and the resulting changes in consumer behavior require sponsorship activations to work harder and smarter to break through.
4/13/09: For J. Johan Jervoe, corporate vice president, global marketing at McDonald’s Corp., the role of marketing today can be summed up in one word: connecting.
Whether it is linking brands to consumers or consumers with other consumers, establishing connections is at the heart of the company’s worldwide marketing efforts, including its portfolio of international sponsorships, which include being an IOC TOP sponsor, a FIFA World Cup sponsor and an official partner of the UEFA European Championships soccer tournament.
In his 12 years with the quick-service giant, Jervoe has had responsibility for its global sponsorship efforts, including contract negotiation, implementation, activation and execution. He also is chairman of the World Federation of Advertisers’ sponsorship taskforce.
In his keynote address at IEG’s Singularity conference last month, Jervoe shared many of the key insights–particularly in the area of consumer behavior and the role technology plays in how consumers interact with information and each other–that are driving McDonald’s global marketing strategies, and which have caused it to change its approach to sponsorship activation.
Below are excerpted remarks from his presentation:
When it comes to the consumer marketplace, we often hear that the environment has changed. Or that it’s a new game. I don’t think so.
I think the underlying fundamentals are still there. There are some new elements, but it’s definitely not a new game.
The first argument that there is nothing really new can be seen in a look at the consumer landscape, in particular at the last four major generations, and comparing the traits of the people in the generations at either end–those people who are today over age 84 and those who are under age 26. There is great similarity between the GI Generation and Gen Y.
Both generations are defined as civic, influenced by events, connectors, family oriented, optimistic and difference-makers, with the best describing factor being “the cause is greater than themselves.” None of those descriptions apply to Baby Boomers or Gen X.
By looking at the past, we can gain rich insight into the likely future behavior of Gen Y. That is why I’m very optimistic about this group being the one to bring us fully into this century. This is a generation of givers.
The second argument that the game has not changed is that when looking at human interaction, there are five fundamental, underlying principles that have been true for the last 90,000 years. They are: self-expression, connection, knowledge, commerce and entertainment. That has not changed.
We can see all of these in the examples people mistakenly use to say the game has changed: YouTube? Self-expression. Facebook? Connection. Wikipedia and search engines? Knowledge. Amazon? Commerce. And so on.
What Has Changed
So the game has not changed, but there are things that are new to the game. And we need to take into account their implications for what we do and, specifically for this discussion, what they mean for our activation and how it can become more engaging and relevant.
These three revolutionizing developments are broadband and its access, the cost of digital storage and its integration, and the democratization of content creation and its influence.
These developments have many implications for brands as they relate to the five underlying principles of interaction. Consumers are able to go on Nike ID or on Polo Ralph Lauren or on many other commerce sites where there is recognition of a global brand, but where the consumer is able to create his or her own look and feel to the product, to individualize it–self-expression.
Think about connection. The reason people like social media is the sense of belonging it gives them, the sense of knowing that their friends are just a couple of clicks away. This is a huge insight into why social media works.
There are two reasons why people go online: friendship driven and interest driven. If you look deeper into the research, 53 percent of all people going online are communicating about brands, and 61 percent say they trust recommendations posted by others, including strangers.
Searching is the number one thing people do online. Everything can be searched for and everything can be found. If we think about all of this in terms of what we do with brands, how we try to connect and how we have been used to pushing messaging out, the implications begin to become quite clear.
But before we can determine the right course of action, we also need to look at what are the implications of the three developments for the consumer? The implications are: increased control; involvement and opportunity; and the digital amplification of an experience.
Increased control. The consumer can now say, “I decide how I consume information and experiences.”
Information snacking, or content snacking, online is the reality of today. If you look at media fragmentation and choice today compared to where we were just five or 10 years ago, standing out from the clutter is increasingly more difficult.
So increased control has an influence on the “push” for marketers. But it also influences the “pull.” Consider the example of the YouTube video “Fast Food Freestyle,” which is a couple of guys in a McDonald’s drive-thru rapping their order. Now you might think to yourself, “Who cares?” Well, 13.5 million people cared enough to watch it online. I don’t think you can do that if you push it.
Involvement and opportunity. We know that Gen Y wants to be involved in causes that are bigger than themselves and that they want to make a difference in the world.
Well, our three revolutionizing developments mean the consumer also can now say, “I’m part of something larger and my actions can make a bigger impact.”
Consider that the first “news” photo of U.S. Airways Flight 1549 floating in the Hudson River in January was taken by ferry passenger Janis Krums, who took the photo with his iPhone, put it on Twitter and 34 minutes later was being interviewed on MSNBC.
Amplification. Digital gives consumers an opportunity to express themselves in ways they have not expressed themselves before, and to share that expression with a lot of other people.
One example that is descriptive of that environment is iPhone applications, which allow you to do anything from drinking a virtual beer out of your phone to being able to update your Facebook account with just one click.
What is interesting here is the grassroots element. If you have a great idea and have some technical knowledge, Apple will make your application available to everyone.
Think about what that means to an individual consumer who is now able to have that type of influence through something they created. This is commerce, entertainment, self-expression, information, and knowledge all coming together.
Impact On Sponsorship Activation
In the old tools-centric activation model, the company would buy sponsorship rights and then figure out how to utilize a lot of tools such as media, promotion, point-of-sale, mobile, PR, packaging, etc. to push it all out to the consumer, and then it was over.
This model is impossible to use in an era of information snacking, content creation and a new purchase pathway. It is impossible to break through that clutter.
There are two challenges in sponsoring: The first is saying “no”–because you have so many opportunities on the table and you cannot do them all–and the second is ensuring that what you do stands out.
At McDonald’s, we talk about that second piece as finding the big leadership idea, or the leadership action, that will enable us to rise above the clutter.
Doing so is critically important because that leadership action is the base of a pyramid that eventually gets us to where we need to be.
Moving up the pyramid, the right leadership action creates awareness. Now, we often hear, “Everybody knows McDonald’s. Why do you need awareness?” My response is awareness is a little bit like flying an airplane. You can turn off the engine and keep flying for quite a while, but eventually you are going to hit the ground.
So awareness is important. And it leads to our next level, familiarity with your brand, your products, your service and what you are offering right now.
If you are doing things right, familiarity will lead to the next level, favorability, and then favorability will lead to trust. Brand trust happens when you deliver on your promise and a consumer is able to predict your future actions based upon interaction with you in the past.
At the top of the pyramid, trust leads to advocacy, where the consumer starts speaking about your brand and your actions without you having to prompt them.
So that all starts with our big leadership idea. If we look back again, our old activation models discussed 360-degree marketing, or surround-around or wraparound marketing. Whatever we called it, the idea was to hit the consumer from all sides.
There is nothing wrong with that concept. What has to change about it though is what we are surrounding the consumer with.
You have to get together with the rights owners, your agencies, media and broadcasters to determine rights and benefits that are not just off-the-shelf and which will create the unique selling proposition of this sponsorship and its activation.
That is when the big idea will jump out. You also have to carve out space that enables consumer-generated content, and your efforts have to all focus on being consumer-engagement-centric.
This approach will typically require you to do fewer things, but do each one better and deeper and with more understanding. That will be the way to stand out. It can’t be 15 different tools anymore.
Leadership Action: The Lost Ring
That was essentially the process that began for us in ’07, when we identified that we wanted to connect with young adults in a different way around our TOP partnership.
The brief could have been worded a bit like this: “How can we create a brand relevance with young adults in a fun and engaging way that reflects the spirit of McDonald’s and the values of the Olympics?”
What resulted was a global alternate reality online game: The Lost Ring (TheLostRing.com), which was very different from anything we or the IOC had ever done. As a sponsor, you need to have a rights owner partner who is willing to go down new roads, and we thank the IOC for doing that with us.
We started with an unbranded teaser campaign because we knew that our young adult target feels a little offended when you start yelling at them constantly with brands. For us, this was about prominent branding, not dominant branding, or proud branding, not loud branding.
The Lost Ring teaser went live when we sent a box of clues to 50 gatekeeper gamers around the world. Those 50 gamers began spreading the word through blogs, and over time they became aware of the characters in our game and its story of the legend of a lost ring, athletes from a parallel universe and the need to “save the world” by reviving a forgotten ancient Olympic sport.
We built a network of sites and laid the framework with content, clues, and artifacts hidden around the world, including in the Olympic museum in Switzerland. But the gaming community really took the ball and ran with it, which was the key to our success.
Players of the game built their own sites, and created beginners guides, videos and translations to work together to solve the mystery.
Overall, did it work for us? We think yes. In terms of results, The Lost Ring became the largest and the first global alternate reality game. Five million people in more than 100 countries participated in the game and in its live-event extensions.
It had just about a six-month lifespan, which is pretty good for an Olympic campaign. We had more than 430 million measured media impressions, 22 million PR impressions and 10 million blog impressions
From a brand perspective, we had a significant increase in brand favorability among the target market and also a significant increase in future-visit intent. In fact, The Lost Ring generated the biggest future-visit intent numbers of any of our activities around the ’08 Olympics.
As we look to the future as it relates to sponsorship, McDonald’s is committed to maintaining its current partnerships and continuing to figure out how to do things more effectively, because we know sponsorship works.
In particular, when times get a little harder, sponsorships that connect with people’s passions in a relevant, engaging way are the answer to connecting better with your consumers.
To accomplish all of this, you must, as we say at McDonald’s, “Keep your eyes on the fries.” That means execute, stay true to what you stand for, and make sure you understand that you are involved in this sponsorship or this activation to get more sales than if you weren’t involved with this activity.
Sources
McDonald’s Corp., Tel: 630/623-3000