NEW BUSINESS PITCH

I’M LOVIN’ IT

NAME BRAND PITCH TYPE

AdvertisingWork

MARKET

United States

DATE

April 26 , 2016

The Data You Need to Win This Pitch

McDonald’s puts U.S. creative

account in review.

th

DESCRIPTIONMcDonald's is issuing a request for proposals to three major holding companies to find a single creative agency to work on its massive

U.S. business. McDonald's currently has Omnicom's DDB and Publicis' Leo Burnett handling the bulk of its national advertising. Both Omnicom and Publicis are part of the RFP process that begins Monday, along with WPP. The move comes as McDonald's has

determined that it wants a more uniform set of creative and strategic ideas. It also wants to be able to push those concepts more rapidly across the variety of channels where it puts its messaging, including everything from its mobile app to television commercials.

Client Profile / Market

Dick and Mac McDonald opened their eponymous burger stand in 1948 in San Bernardino, Calif. Under the guidance of Ray Kroc, a onetime milkshake-mixer salesman wowed by the restaurant's success, McDonald's franchises grew swiftly: by the end of the 1960s, there were more than 1,000 across the U.S. The first international franchise opened in 1967 in British Columbia, and was followed by another in Costa Rica later that year. From there, the chain spread steadily: over a six-month period in 1971, Golden Arches popped up on three new continents, as stores launched in Japan, Holland and a suburb of Sydney. A Brazilian McDonald's opened in 1979, bringing Ronald McDonald to South America for the first time. McDonald's reached its sixth (and, barring a sub-Arctic drive-thru, final) continent in 1992, with the opening of a restaurant in Casablanca, Morocco.

FINANCIAL OVERVIEWCOMPANY BACKGROUND

MAIN COMPETITORS

2015 Sales (mil)

2015 Employees

Employee Growth Percent

Assets (mil)

Net Income Growth Percent

Sales Growth Percent

25,413

420,000

NA

37,938.699

-4.8%

-7.4%

Fast Food industry in numbers

2015 U.S. REVENUE

$225b- IBISWorld -

50% 50%

Quick Service Restaurants (Fast Foods + Fast Casual)account for half of sales in the entire restaurant sector

OTHERS QSR

200,000FAST FOOD IN THE U.S.

ANNUAL GROWTH 10-15

2.5%- IBISWorld -

Americans and Fast Foods

FAST FOOD FREQUENCY

AMERICANS EAT AT ONE FAST FOOD EVERYDAY

50MLN- Pew Research Center -

30%OF CHILDREN AND ADOLESCENTS,AGED 2-19, CONSUME FAST FOOD

ON A GIVEN DAY- CDC's National Center for Health Statistics -

Fast Food: a convenient choice

AMERICANS SPEND

10% OF THEIR DISPOSABLE INCOME ON FAST FOOD EVERY YEAR. 20% OF ALL AMERICAN MEALS

ARE EATEN IN THE CAR

30%

22,5%

7,5%

0%

15%

In-N-OutFive GuysMcDonald’s

29%

11%9%

17%

12,7%

4,25%

0%

8,5%

WhataburgerIn-N-OutFive Guys

17%

11%

17%

FAST FOOD WITHTHE BEST FRIES

FAST FOOD WITH THEBEST BEEF BURGER

Cheap 31,7%

I just Like it 30,6%

Lack of other Options 13,2%

Other 5,6%

Convenient 67,2%

REASONS TO EAT AT FAST FOOD RESTAURANTS

- Stanford University Research - - Advocate Health Care -

- YouGov, June 2015-

McDonald’s still the biggest player

40.000

30.000

10.000

0

20.000

McDonald’s

FAST FOOD by REVENUE

Starbucks Subway Burger King Wendy’s Taco Bell

35.447

12.68811.900

8.640 8.5128.200

McDonald’s 2015 Global revenue

$25.4b

of its system restaurants

40%U.S. Market represents

The Golden Arches had to Face 2 Years of Decline

McDonald’s 2015 ExpenditureOn measured media

$824M

(not franchised) outletstores in 2015

154In U.S. McDonald’s closed

1

0

- 2

- 1

McDonald’s U.S. BUSINESS FINALLY IMPROVING

- 3

0.70%

Q3-13

Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q3-15

-1.40%-1.70%

-1.5%

-3.30%

-1.70%

-2.6%

-2%

Q3-13

0.90%

The restaurant chain’s U.S. comparable sales rose for the first time in 2 years in the third quarter

Source: Company Filings

McDonald’s Innovation to Rise Again

ALL DAY BREAKFAST CREATE YOUR TASTE GREEN COMMITMENTS

“Sales for Egg McMuffin in September were up 21% compared to the in-going

period”

Mike Andres, president of McDonald’s USA

- Nov. 2015 -

The company is working with franchisees to develop a consistent, predictable and compelling national

value platform.

“The new platform will not be tied to a singular price point, but it will enable

our customers the opportunity to bundle their own meals to suit their desire, which they have indicated to

us is very important to them”

The company previously committed to sourcing antibiotic-free

chicken by 2017

McDonald’s plans to use only cage-free eggs over

the next decade

McDonald’s also has changed beef-cooking and bun-toasting procedures to produce tastier, juicier hamburgers.

Consumer trends

83% of consumers like to patronize restaurants known for treating their employees well.

73% of respondents choose to patronize restaurants that support their local community or causes they believe in.

At restaurants that promote positive business practices and responsibly source ingredients, 52% expect fresher food, 48% expect healthier food, 45% expect the food to taste better, and 33% expect the food would cost a bit more but be worth it.

The top menu claims that influence consumers' menu choices were: Fresh (86%); Local (73%); Whole Grain (68%); All Natural (66%); and No High Fructose Corn Syrup (62%).

Other menu claims that influence ordering include: Grass Fed/Pasture Raised (59%); Hormone Free (57%); Antibiotic Free Protein (56%); Free Range/Free Roaming (55%); Non GMO (55%); Sustainably Caught/Raised (54%); Fair Trade (54%); Heirloom Fruits and Vegetables (52%); Cage Free (52%); and Organic (50%).

40%

30%

10%

0

20%

Jersey Mike’s Subs

FASTEST GROWING RESTAURANT CHAINS

Chipotle Mexican Grill Firehouse Subs

- Nation’s Restaurant News, June 2015 -

Total Unit GrowthSales Growth

THOUGHTFUL EATERS

• • •

• • •

QUICK DEFINITION

“These young consumers are responsible about their diet. Food for them is a source of nutrition as well as enjoyment. They are not on any particular diet, rather do their best to eat a healthy, balanced lineup of meals. They try to eat breakfast every day,

regularly eat organic foods, and rarely eat fast food. Eighty-five percent of this segment are female.”

HEALTH RESTAURANTS PEOPLE AND SOCIETY

FOOD

THOUGHTFUL EATERS: FOOD MCDONALD’S AUDIENCE CROSSOVERS

Organic & Natural foods are poorly popular

(P: 48.3)

The Foodies trait is popular also on McDonald’s audience

(P: 173.6)

Udi’s (R 46.9). Van’s foods (R 41.1) and Earthbound Farm (R 78.9) are not

appreciated food brands.

Juicing Vegetable (R 34.0), Food Babe (31.2) and 12Tomatoes (51.9) are not

followed.

TOP FOOD BRANDS TOP FOOD REFERENCES

UDI’S VAN’SFOODS

EARTHBOUNDFARM

JUICINGVEGETABLES

FOODBABE

12 TOMATOES

FOODIES168.6

( popularity index )

ORGANIC &NATURAL FOOD

199.6( popularity index )

KNOW MORE?

KNOW MORE?

THOUGHTFUL EATERS: RESTAURANTS MCDONALD’S AUDIENCE CROSSOVERS

Peet’s Coffe (R 50.2), Earth Fare (R 82.5) and The Cinnamon Snail (R 83.6) are

underindexing.

McDonald’s audience underindexing on Fine Dining Restaurants

(P: 73.2)

35% of McDonald’s followers is interested in Casual Dining Restaurants

Chez Panisse, Seasons 52 (R 57.6) and Commander’s Palace are underindexing.

TOP SERVICES

EARTHFARE

PEET’SCOFFEE

THE CINNAMONSNAIL

FINE DINING 26.8%RESTAURANTS122.9

( popularity index )

TOP SERVICES

CHEZPANISSE

SEASONS52

COMMANDER’SPALACE

Interested in casual dining restaurants, food trucks

& others

KNOW MORE?

KNOW MORE?

THOUGHTFUL EATERS: PEOPLE & SOCIETY MCDONALD’S AUDIENCE CROSSOVERS

They are not Local Participants at all(P 9.1)

Just the 58.8% of McDonald’s audience is interested in People & Society.

Social Issues and Advocacy (46.9%)And Green living and Environmental

issues (P 32.4) don’t catch their attention.

The Non-GMO project is almost unknown to the McDonald’s audience

(R 21.3)

80.8%Interested in

People & Society

70.2%cares about SocialIssues & Advocacy

Green Living &Environmental Issues

187.7popularity

TOP ORGANIZATION / MOVEMENT

NON GMOPROJECT

LOCAL PARTICIPANTS128.5

( popularity index )

TOP SOURCES

NATURALNEWS

ATTAINABLESUSTAINABLE

ONE GREENPLANET

KNOW MORE?

KNOW MORE?

THOUGHTFUL EATERS: HEALTH MCDONALD’S AUDIENCE CROSSOVERS

Sunwarrior’s holistic approach doesn’t attract at all the McDonald’s audience.

People interested in McDonald’s isn’t Health Conscious at all

(P 15.8)

Herbs & Oils World (R 29.5) and Mountain Rose Herbs (R 22.7) aren’t relevant

brands.

All the resources exploited by Thoughtful eaters are little relevant to people interest

in McDonald’s.

TOP HEALTH RELATED NEWS SOURCES

GLUTEN FREERESOURCESDIRECTORY

MINIBODY GREEN

EVERYDAY ROOTS.COM

HEALTHCONSCIOUS

192.7( popularity index )

TOP HEALTH BRANDS

SUNWARRIOR HERBS & OILS WORLD

MOUNTAINROSE HERBS

KNOW MORE?

KNOW MORE?

4.5%

THOUGHTFUL EATERS

McDonald’s - Thoughtful EatersAdherence

McDonald’s audience share just the 4.5% of

Thoughtful Eaters behavior on Food,

Restaurants, People & Society matters

and Health.

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