McDonald’s was mentioned a lot in the media and communications circles over the past two weeks, but much of that coverage – at least the reports focused on Burger King’s collaborative "McWhopper" offer – was not positive.
Andrew Collins, CEO of digital agency Mailman, said McDonald’s looked like "the no fun police." PRWeek readers voted that McDonald’s fared worse than Burger King in the exchange by a nearly two-to-one ratio. And Forbes contributor Will Burns wrote that the decision to shun Burger King’s offer was a mistake, saying, "McDonald’s is at, or near, the bottom in every medium for advertising effectiveness…the brand clearly needs a boost."
That breakthrough could be right around the corner, as McDonald’s starts aggressively promoting its new all-day breakfast menu, which The Wall Street Journal called "the franchise’s biggest operational change in years."
So far, the reaction to McDonald’s serving Egg McMuffins and Sausage McGriddles all day has been positive.
But is an expanded breakfast menu really a huge step? And is it a smart one? PR executives say the answer to both those questions is "yes."
Michael Olguin, president and CEO of Havas Formula, says the move makes sense, and should help McDonald’s capitalize on its existing customer base, even if it doesn’t immediately bring in new fans.
"If you’re not a regular goer, you’re not going to automatically start going to McDonalds. But what you’re going to do is consider McDonald’s at other parts of the day," Olguin explains. "So my recommendation is that they should be marketing to their existing consumers. Going out to new consumers is probably not going to be super successful initially."
He adds that coming around on all-day breakfast fulfills one promise of recently appointed CEO Steve Easterbrook: rebuilding a sense of excitement about the brand.
Steve Bryant, MSLGroup’s food and beverage leader for the US market, has a similar analysis of the all-day breakfast launch. He notes McDonald’s is trying to bring back previous customers and increase the frequency of existing patrons’ visits. Bryant also concurs that the move is important for the bottom line of McDonald’s.
Although he adds the breakfast expansion makes sense, it remains to be seen whether it’s a sustainable option for the fast-food giant, which earlier this year simply stopped reporting flagging monthly sales figures.
"If [the all-day breakfast menu] drives greater sales and turns around their sales decline, then it’s a brilliant strategy. I think it is good," Bryant explains. "What you would maybe question is: is it a long-term play? What comes next? This could bolster them for now, but where does it lead?"
The fast-food chain reported in July that its second-quarter global comparable sales were down 0.7%. US sales declined 2% in the second quarter. Profit was also down 13% in the period, while revenue dropped 10% compared with the prior year.
In an effort to bolster its turnaround attempt, the company also named former White House Press Secretary Robert Gibbs as global head of communications in July, replacing longtime McDonald’s veteran Bridget Coffing. It also brought on Silvia Lagnado, most recently CMO at Bacardi Limited as EVP and global chief marketing officer.
Changing in a quickly changing world
Another challenge facing fast-food restaurants in general is that standards of convenience are evolving, especially among the key Millennial audience. That group, more than any other generation, wants to consume products – whether food, media, or anything else – when they want, where they want, and with little to no wait time. And although all-day breakfast options increase menu variety, Bryant says establishments such as Whole Foods offer a wider range of options still, including many premade and ready-to-eat items.
The addition of tried-and-tested breakfast favorites to an all-day menu also raises questions about whether the brand can succeed innovating on new products and expanding its customer base, especially when it comes to healthy options.
Bryant notes that making room for breakfast items could reduce menu space for the kinds of innovations that could take the brand in a healthier direction.
"But obviously they’ve tried that now for a decade with salads and other healthier fare," he points out. "And they’ve had a hard time generating the kind of revenue they expect and the volume they depend on.
"I think it’s been probably 10-years-plus since they’ve had a really strong, innovative product. Remember, they’ve launched everything from salads to sliced apples, things like that," he notes.
A personalized rollout
The decision to finally offer an all-day breakfast menu was announced on Twitter, where the official McDonald’s account sent personal tweets directly to thousands of users, including celebrities such as Olympian Lolo Jones.
Bryant praises the strategy, dubbed a "people’s launch" by McDonald’s, for putting a personalized touch on what could have been a more corporate PR push.
Olguin also points out that following through with the all-day breakfast fulfils Easterbrook’s promise to rebuild a sense of excitement about McDonald’s, which is something it wanted to promote heavily on social media.
"It’s completely reflective of what the CEO has said he’s going to do. He’s going to shake things up. He said he wanted to be nimble," Olguin says. "It’s significant because it’s telling the marketplace they’re going to do what they say they’re going to do."
Using Twitter to respond to so many tweets calling for an all-day breakfast menu also repositions McDonald’s as meeting the demands of its customers, Bryant says.
"They’ve got a lot of ink centered on meeting consumer demands…and that’s a whole lot better place to be than shrinking sales and the McWhopper situation," he notes. "The next question is, where do they go from here? That’s not as easy a question to answer, but it could span the tide of decline and give them some breathing room.
Inquiries to numerous McDonald’s representatives were not answered by press time.