The Australian Effie Awards Entry Form 2010 Categories...

The Australian Effie Awards

Entry Form 2010 Categories A to P

Entry Number: 197

1. Agency DDB Sydney

2. Advertiser McDonald’s ANZ

3. Entry Title Angus launch – The burgers aren’t better at Hungry Jacks!

4. Category for this Entry M- New Product or Service

5. Author Russ Mitchinson

6. Phone 0409 360 413 7. Email [email protected]

Directions appearing with each question must not to be deleted from the completed case; they serve as a guide for both entrants and judges. All data must include a specific, verifiable source. Refer to the Effie “How to Enter” booklet for guidelines on properly sourcing your data. Data without a source will result in entry disqualification. Answer every question or indicate “not applicable” and define your target audience in the entry. Any unanswered question will result in entry disqualification.

8a Total Campaign Expenditure

Include production and value of donated media and non-traditional paid media. Check one.

x $10 - 20 million

8b What was the strategic communications challenge?

What was going on in your category? Provide information on the category, marketplace, company, competitive environment, target audience and/or the product /service that created your challenge and your response to it.

Macca’s has always been the home of the beef burger. Take the iconic Big Mac launched in 1967 in Pittsburgh, USA and unchanged for 42 years the world over. This burger defines the McDonald’s brand, is used as a global benchmark and sometimes a currency index!1 Or the Quarter Pounder, created in California in 1971 and born of the belief that consumers were looking for a higher ‘beef-to-bun’ ratio, hence the name Quarter Pounder referring literally to a quarter pound of beef; what you see is what you get. Or the humble Cheeseburger, the biggest selling burger at Macca’s2. With this proud heritage of beef burgers, Macca’s should be free to dominate the landscape. Not so, our burger business was in trouble as the burger landscape had changed; we were losing precious sales to smaller, nimbler, more ‘gourmet’ burger joints such as Burgerlicious and Bite Me, offering better buns and special relishes3. Even our key competitor Hungry Jack’s burgers were indeed perceived as being ‘better’4. In fact the perception of Macca’s beef was increasingly ‘low quality, poor taste, unhealthy and processed’5. Once quality perceptions of your core offering begin to shift downwards, consumers soon vote with their feet. This core business issue had to be addressed and fast. The proposed solution was to launch a new ‘premium’ beef burger into the Australian marketplace. This had to succeed on two fronts; first to create sales for this product and second to have a halo effect on beef quality perceptions at McDonald’s. However, this presented us with a strategic communication challenge; could Macca’s credibly play in the premium space without denigrating its core beef offering? This launch wasn’t to be at the expense of our iconic Big Mac, Quarter Pounder and Cheeseburger and premium from Macca’s seemed something of a contradiction in terms... The economic environment set another hurdle for the launch; could we successfully launch a premium product in the depths of a credit crunch? All around, ‘sub-prime’ loans were failing and the government had to step-in to bolster the sagging property market

6. Against a backdrop of rising fuel prices and falling

consumer sales, surely this was the wrong time to launch premium to the mass market?7

1 McDonald’s Marketing 2009 2 McDonald’s Consumer & Business Insights 2009

3 OMD and DDB competitive review 2009

4 IMI International 2009

5 Galaxy Research Project Grind 2008

6 Australian Bureau of Statistics 2009 7 Consumer confidence index, AusScan 2009



8c What were your objectives? State specific goals.

Your entry is expected to include compelling data including behavioural objectives and results. Only in rare instances are the judges likely to award an entry that only demonstrates attitudinal changes. Provide a % or # for all goals. If you do not have a specific type of objective (e.g. no quantifiable objectives), state this in the entry form and explain why and why the objectives you do have are significant and challenging in the context of your category, etc. You must provide benchmark and context for your goals versus year prior and in context of competitive landscape and category.

Our objectives were four fold; two immediate sales driving objectives (in the world of fast food you need fast results), and two longer term perceptual shifts. Immediate

1. Step change our beef offer by generating 6% volume of total beef sales, but not at the expense of current chicken sales

8

2. Grow total burger sales by 2% volume post launch9 Longer-term

3. Beat the beef quality perceptions of our main rival Hungry Jack’s10

(measured through the tracking measure ‘The best quality beef burgers’ and highest preference)

4. Build the total business’ beef quality credentials post launch (measured through 3% movement in the measure ‘Has good quality beef’)11

9a

What was your strategy – and how did you get there?

What was your strategy? Was it driven by a consumer insight or channel insight or marketplace / brand opportunity? Explain how it originated and how the strategy addressed the challenge.

Our strategy to revitalise McDonald’s beef offering was to initially target those more resistant to the McDonald’s brand; they visited Macca’s less frequently than our loyalist. However these consumers had a bit more cash in their pockets and would be attracted by higher product quality to enter Macca’s. These consumers had more time on their hands to enjoy the finer things in life; they were our middle Australian mums and dads. However in these straightened times, even ‘Gus and Penny from Bankstown’ were cautious about ‘trading-up’ to anything a bit pricey. They’d need a lot of convincing that the product was great quality and really worth paying extra for, now more than ever before12. When we talked to our resistors Gus and Penny, about a ‘better beef burger’ at McDonald’s we were treated with a degree of cynicism; “I don’t think that Macca’s can do those special burgers”13. We needed to address this issue with a compelling and disarming message, providing assurance and proof points of great quality ingredients, if our launch was to be a success. Therefore we focused on a brand truth to differentiate us from the competitors’ offerings and allow us to credibly play in the premium burger market. We had to remember that first and foremost we are ‘Macca’s’, no more, no less. To go out with a big claim of quality and premium-ness was going to be met with disbelief; we hadn’t earned the right to play in that space. The basis for McDonald’s brand truth is that everyone in Australia has been imprinted by subconscious emotional connections with the brand, in many instances formed in childhood. These connections give us a well of deep-set emotion to tap into through communications, product development, restaurant design, etc. One of the most powerful emotional connections is that you’re free to enjoy yourself at McDonald’s; you can wear what you want and eat with your hands, uninhibited by the restrictions of adult life. You can just enjoy yourself in a playful and care-free fashion14. Our strength as a brand lies in the fact we offer ‘something for everyone’, that we aren’t ‘stuck-up’ and that ‘everyone feels welcome’ at Macca’s. It’s these brand strengths based on deep emotional

8 McDonald’s Consumer and Business Insights 2009

9 McDonald’s Corporation 2009

10 IMI International beef tracker 2009

11 FastTrack quant tracking study 2009

12 Australia Scan 2009 13 George Stent research, 2009 14

Galileo Kaleidoscope depth qual research, 2009



connections, that we would have to play-up if the quality of our new beef burgers was to be seriously considered by our campaign target.

9b

What was your big idea? What was the idea that drove your effort? The idea should not be your execution or tagline. State in one sentence

Only Macca’s offers premium without the pretension You can buy fancy burgers elsewhere but only Macca’s allows you to freely enjoy quality burgers in a down-to-earth, playful and unpretentious way.

10 How did you bring the idea to life?

Describe and provide rationale for your communications strategy that brings the idea to life. Explain how your idea addresses your challenge. Describe the channels selected/why selected? How did your creative and media strategies work together? In not more than three A4 pages show sufficient creative examples to enable the judges to understand the campaign. These pages can be additional to the seven A4 page written entry.

The ‘premium without pretention’ strategic springboard gave our creative teams the opportunity to have a bit of ‘Macca’s fun’ with these new premium beef burgers. So was born the campaign idea ‘It’s a little bit fancy’, because that’s exactly what the new burgers were; the finest quality ingredients of prime Angus beef, soft sourdough buns, red onion, etc. but all enjoyed in a distinctly Macca’s and unpretentious way. The executions aped ‘fancy’ restaurant behaviour in the safe confines of your local Macca’s, self-referential and knowing humour; a gentleman offering his good lady the ‘vintage sparkling cola’ to ‘accompany’ her Grand Angus burger; a caller asking to ‘make a reservation’ to enjoy the new Mighty Angus burger with a table by the window; or a customer jokingly asks to see the ‘dessert menu’, only to be pointed to the menu board by a bemused crew girl. We also created ‘food only’ spots, lovingly shooting the prime ingredients with an amusing Michael Caton voiceover, making the ordinary extraordinary to land the executions back in the ‘It’s a little bit fancy’ idea. We were almost ‘taking the piss’, a rare thing for a big brand to do. This allowed McDonald’s to come across as more genuine, authentic and true, but still with a playful twinkle-in-the-eye. Michael’s voiceover became a distinctive branding device for premium from McDonald’s.15 Our use of a Black and Gold pallet also signalled a premium departure for the brand, away from our standard Red. The campaign idea stretched into outdoor, press, radio, online, in-restaurant and in-video game! The supporting Media Strategy created a multi-channel campaign focused on ‘post special event’ environments, such as after a concert, after sport or watching the footy game; anywhere a semi-celebratory moment or reward might occur (such as enjoying a premium Angus burger), thus perfectly amplifying the ‘It’s a little bit fancy’ creative thought. (see attached creative sheets) As a final accolade, we saw butchers featured on Sunrise TV, talking of the uplift in Angus sales they were experiencing during the campaign period and mentioning ‘It’s a little bit fancy’ by name (showing the phrase becoming part of the vernacular). This illustrates the far reaching effect of this campaign on the Australian beef industry; “Australia’s farmers will be the biggest winners.”

16 We therefore met our

challenge by launching a premium product in a uniquely McDonald’s fashion, and didn’t denigrate our core beef offering in the process.

11 How do you know your campaign was successful?

Detail why you consider your effort a success. Refer to your objectives (results must relate directly to your objectives in (8c) – restate them and provide results) and demonstrate how you met or exceeded those objectives using quantitative and behavioural metrics. Did your effort drive business? Did it drive awareness and consumer/business behaviour? Use charts and data whenever possible. Explain what x% means in your category. For confidential information proof of performance may be indexed if desired. Demonstrate the correlation between activity and outcomes. Make sure you address every objective, whether fully achieved or not. Indicate why the results you have are significant in the context of your category, competition and product / service. You need to convince the judges that the marketing investment provided a positive financial return – if that was a requirement. Indexing of data is acceptable.

15

IMI International 2009 16

Channel 9 2010



Your entry will not be ineligible if you don’t provide any data, but entries that do provide convincing evidence will gain additional marks. (Note that this data can be excluded from the published case on request.)

So how did our premium Angus burger launch fare in a credit-crunch? This has been McDonald’s most successful launch in the last decade, and their most profitable launch ever! We’ve exceed targets by +50% on average, with some restaurants doing four times the projection; in the world of McDonald’s, happy licensees makes for a happy client and a happy agency. These dollars are more than a little bit fancy… SALES RESULTS (Immediate) OBJECTIVE 1 - Step change our beef offer by generating 6% volume of total beef sales, but not at the expense of current chicken sales. RESULTS - We more than met this objective by achieving 10% volume of total beef sales. This generated a staggering 23% value of total beef burgers, creating McDonald’s most successful launch ever!

17

Chart 1 – Angus’s relative sales success

Angus is McDonald’s most successful launch in 10 years

Crispy Chicken

Seared Chicken

Name it

El Maco

McFeast

Angus

0

20

40

60

80

100

120

140

160

180

200

1 2 3 4 5 6 7 8 9 10 11 12

Source: McDonald’s Consumer and Business Insights, 2009

Indexed

Weeks from launch

Chart 2 – Angus’ sales outstripped predicted objectives (indexed)18

17

McDonald’s Consumer and Business Insights 2010 18

McDonald’s Consumer and Business Insights 2010

0

50

100

150

200

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

A



Chart 3 – Angus’ sales outstripping projected volume by 87%19

OBJECTIVE 2 - Grow total burger sales by 2% volume post launch. RESULTS – We’ve more than met Objective 2 by growing total burger sales across beef and chicken by 3.8%, an impressive feat for our total burger portfolio. This equates to a staggering 11.5% growth in the total value of McDonald’s beef burgers! Chart 4 – Angus has grown the total burger portfolio

Total burger sales have grown by 3.8% since the Angus launch, through a mix of trade up + incremental units

Source: McDonald’s Consumer and Business Insights, Angus Sales Results. October 2009

65%59% 56% 56% 56% 58% 60% 59%

35%

33%31% 32% 32%

33%35% 34%

0%7% 15% 15% 15%

14%13% 13%

0%

20%

40%

60%

80%

100%

120%

Weeks 31 to

35

35 36 37 38 39 40 41

2009 Calendar Weeks

Ave

rag

e W

ee

kly

Un

its in

de

xe

d t

o W

ee

ks 3

1 t

o 3

5

Total Beef (excl Angus) Total White Meat Angus

19

McDonald’s Consumer and Business Insights 2010

0%

100%

200%

300%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Actual % of projected volume by week

Actual % …



Chart 5 – Angus’ effect on total business sales

McDonald’s comparable store growth increased 4.6% due to Angus

Source: McDonald’s Consumer and Business Insights 2009

0%2%4%6%8%

10%12%14%

10 weeks pre

Angus

10 weeks post

Angus

Comparable store growth

Chart 6 – High correlation between activity and sales20 (indexed on first observation due to confidentiality)

Chart 7 – High strength of correlation between media spend and sales results

21

Regression Statistics

Multiple R 0.95

R Square 0.90

Adjusted R Square 0.87

20 McD Insights, DDB Analytics and OMD 2010 21 DDB Analytics 2010

0%

100%

200%

0%

100%

200%

36 38 40 42 44 46 48 50 52

Week Number

Spen

d

Sale

s

Angus launch: media spend and …

Sales Spend



TOTAL RETURN ON INVESTMENT We created a linear regression model to determine the strength of the relationship between spend and sales and found that current week spend was strongly related to sales, as was previous week and two week lagged spend. Removing the impact of media, we created a baseline estimate of sales per week and found that the campaign delivered a 250% increase on the level of sales we would have achieved without the media spend. For every $1 spent, we saw XXXXXXXXXX, and with the incremental beef burger sales we yielded an excellent Return On Investment of $5.16. This ensures that the Angus launch is McDonald’s most profitable ever!22 QUALITY RESULTS (longer term) OBJECTIVE 3 - Beat the beef quality perceptions of our main rival Hungry Jack’s (measured through the tracking measure ‘The best quality beef burgers’ and highest preference) RESULTS - This objective has been resoundingly met, beating the beef quality perceptions and preference scores of Hungry Jack’s.23 These perceptions of beef quality are obviously crucial to the long-term success of the McDonald’s business. Chart 8 – Increased perceptions of McDonald’s beef quality vs. Hungry Jack’s

The burgers aren’t better at Hungry Jack’sFor the first time McDonald’s are higher than

Hungry Jack’s for best quality beef burgers

Q. In your opinion, which fast food restaurant makes the best quality beef

burgers?

- 8 gap- 3 gap

+2 %!

Wave 1 Wave 4 Wave 5

Source: IMI International 2009

22

McDonald’s Marketing Department 2009 23

IMI International beef tracker 2009



Chart 9 – Increased preference for McDonald’s beef burgers vs. Hungry Jack’s

Hungry Jack’s is no longer the favourite when it comes to beef burgers

30% 26% 26%

19%17%

12%

13%

13%14%

10%14%

16%

17% 19% 23%

Wave 1 Wave 4 Wave 5

Strongly prefer McDonald’s

Slightly prefer McDonald’s

About the same

Slightly prefer Hungry Jack’s

Strongly prefer Hungry Jack’s

Q. Considering the Beef Burgers available at McDonald’s and Hungry

Jack’s which of these two restaurants would be your preference if you were

after the best quality beef burger?

27%33%

39%

49%43%

38%


OBJECTIVE 4 - Build the total business’ beef quality credentials post launch (measured through 3% movement in the measure ‘Uses good quality beef’) RESULTS - This objective has also been met; building the total business’ beef quality credentials, through a 5% increase in ‘Uses good quality beef’24 post launch. The Angus launch has seen McDonald’s biggest move ever on food quality scores.25

Chart 10 – Increased beef quality perceptions on all measures

All beef quality measures increased significantly post launch

32

41

30

44

38

30

29

38

22

41

50

35

49

45

34

35

42

30

Unaided Best Quality QSR Provider of Beef Burgers

Overall Liking of McDonald’s Beef

McDonald's uses good quality beef

McDonald's has been improving the quality of its food

McDonald's ingredients are sourced from Aussie farms

McDonald’s burgers taste delicious*

McDonald’s burgers hits the spot when I’m hungry*

McDonald’s food tastes good*

McDonald’s beef is juicy and flavoursome*

Week 1

Week 8

* Drivers of overall liking


24

FastTrack quant tracking study 2009 25

McDonald’s Marketing Department 2010



AWARENESS RESULTS

We received ‘very impressive conversion effectiveness at 43% of those aware having purchased’26 and very high awareness levels for the Angus launch campaign, setting a new standard for IMI International’s tracking database. Unprompted awareness was unprecedented for any launch in the industry; 60% for Angus vs. 15% as the industry standard.

Chart 11 – Very high advertising awareness

27%37%

52%60%

0%

25%

50%

75%

100%

Week2 Week 3 Week 4 Week 5

Actual Highest in database

At Week 12 – Crispy Chicken

Fillet Burger 23%

Angus exceeded this at Week 2

6 in 10 Australians mention McD Angus unaided 9 in 10 mention McD Angus when prompted

61% 56%

83% 91%

0%

25%

50%

75%

100%

Wave 2 Wave 3 Wave 4 Wave 5


At Week 5

$4.95 HJ Stunner deal 70%

KFC Cayan Grill 63%

Unaided Awareness

Aided Awareness

OVERALL RESULTS CONCLUSION The Angus launch has been a phenomenal success for McDonald’s. We have more than met our initial objectives; from individual sales of Angus burgers, to a halo effect on all burger sales, growing the total value of our beef burgers and removing Hungry Jack’s dominance of quality perceptions. The Angus burgers have created an annualised brand value which is more than twice that of the iconic Big Mac!

27 It

should therefore come as no surprise that the Angus launch has been McDonald’s most effective and successful to date. 12 Convince us that the result was not due to other factors.

You must explain in your entry the effect of any other potentially relevant factors such as product changes, pricing changes, distribution changes, competitive activity, press coverage, economic conditions, weather etc. Advertising does not often work in isolation, but the judges need to be convinced that your campaign had a major impact on results.

In order to isolate the effect of the Angus campaign, we’ve discounted various other factors: 1 Price The launched prices of Angus burgers were permanent prices and therefore there were no additional price promotions during the campaign which could have had an impact on these results.28 The price of a Grand Angus is at a premium to any burger at McDonald’s and to most others on the high street. 2 New product Although the Angus burger was a new product, it wasn’t a new protein from McDonald’s (the home of the beef burger). We had launched premium burgers before, most recently the Crispy Chicken burger in 2008.

26

IMI International 2009 27

McDonald’s Consumer and Business Insights Oct ‘09 28

McDonald’s Corporation 2009



The Chicken launch wasn’t as effective as Angus, despite the sensory score of the burgers themself being on par (both burger’s ‘Liking of taste’ scores at 76%)29 3 New restaurant openings We saw 27 new restaurants opened in 2009, with 19 of these restaurants opened in the campaign period. However these new restaurants only accounted for 2.3% of the total Angus sales. 2008 in comparison saw 43 new restaurant openings.30 4 Competitive activity CONFIDENTIAL XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 5 Media spend McDonald’s saw a 4% increase in media spend from 2008 to 2009. However, our main competitor Hungry Jack’s grossly outstripped us by increasing their media spend 14% in the same period31

13 Executive Summary An Executive Summary of no more than 100 words is also required (not included in page count).

Our Angus launch campaign was McDonald’s most successful, profitable and effective ever. That’s saying something from one of Australia’s most successful companies. This launch campaign almost doubled projected sales, created double the annual brand value of the classic Big Mac, grew the total value of our beef burgers by over 10%, and saw Macca’s biggest ever shift in food quality scores, ensuring the long-term success of their core beef range. Thanks to this campaign, the burgers are no longer better at Hungry Jacks! All this for a return on investment of $5.16 for every $1 spent...‘It’s a little bit effective’. “We’re really proud of the creative work and sales show this is our most profitable product launch ever!” Helen Farquhar, Chief Operating Officer, McDonald’s Australia

APPENDIX 1 – Campaign Creative COLA 2009 TVC 30”

29



OMD 2010



SERVIETTE 2009 TVC 15” ANGUS FOOD ONLY 2009 TVC ENDFRAME

Need For Speed Undercover DIGITAL BILLBOARD Shaun White Snowboarding DIGITAL BILLBOARD



‘B.Y.O. CULTERY’ OUTDOOR BILLBOARD ‘BREAD’ PRINT ADVERTISEMENT ‘WHITE PLATES’ PRINT ADVERTISEMENT APPENDIX 2 – Media Plan

The Australian Effie Awards Entry Form 2010 Categories...

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