Report: McDonald’s to Launch Digital Marketing Fund, Add Ordering Channels
McDonald’s is reportedly set to modernize its marketing strategy by launching a digital marketing fund to be paid into by its U.S. franchisees.
The move aims to modernize the fast-food giant’s marketing approach, enhance its competitive advantage and strengthen its position in the digital business landscape, CNBC reported Thursday (May 9), citing an internal company memo.
McDonald’s did not immediately reply to PYMNTS’ request for comment.
The company plans to require its U.S. operators to contribute to the digital marketing fund starting next year, according to the report.
The introduction of the digital marketing fund is part of McDonald’s broader efforts to expand its digital business, the report said, citing the memo. The company plans to invest hundreds of millions of dollars in the coming years to improve its loyalty program and introduce new ordering channels. These initiatives include web orders without the need to download an app.
McDonald’s loyalty program members generated over $6 billion in system-wide sales globally during the first quarter, per the report.
The company recognizes the importance of digital marketing in gaining a competitive edge, according to the report. With 34 million active digital customers in the U.S., McDonald’s aims to leverage its digital presence to attract and retain more customers and reach 100 million loyalty program members by 2027.
To fund the digital marketing initiatives, McDonald’s is recommending that franchisees allocate a portion of their existing marketing contribution, the report said. Currently, franchisees are required to spend at least 4% of gross sales on marketing. Starting next year, U.S. operators will contribute 1.2% of projected identified digital sales, such as transactions made through the loyalty program or delivery orders.
The digital marketing fund will not be limited to the U.S. market, per the report. Franchisees in the U.K., Canada, Australia and Germany will also contribute to the global digital marketing fund. McDonald’s plans to gradually transition the rest of its markets to this approach in the future.
When announcing its goal to add 100 million loyalty program members by 2027, bringing its total to 250 million, McDonald’s President and CEO Chris Kempczinski said the company also plans to more than double systemwide sales attributable to those users.
“We have a clear trajectory for future growth as we continue to build on brand strength, global footprint and digital ecosystem that have resulted in unparalleled competitive advantages and cemented McDonald’s as one of the world’s leading consumer-facing brands,” Kempczinski said in a Dec. 6 statement.
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