McDonald’s was the 11th biggest volume advertiser on radio last week according to Media Monitors, which says it ran 28,831 spots on the stations it tracks. More of those spots could wind up on minority-owned stations in the future as McDonald’s announces plans to increase spending with diverse-owned media.
The change will not occur overnight. But by 2024 the company and its franchise owners have committed to more than doubling their marketing spending with media companies, production houses and content creators that are Black, Hispanic, Asian, Women and LGBTQ-owned.
The move means companies such as Urban One, Spanish Broadcasting System and Multicultural Radio Broadcasting could be in a better position to capture the fast food chain’s ad dollars, as well as women-led companies like Seven Mountains Media.
McDonald’s calculates that four percent of its national advertising spending currently goes to diverse-owned outlets. Within three years, it plans to bump that to ten percent. Specifically among Black-owned properties, McDonald’s says it will increase the share of national ad dollars from two percent today to five percent by 2024. The initiative will likely mean ad buyers at McDonald’s roster of ad agencies, including Lopez Negrete and Burrell Communications, will have larger budgets at their disposal.
While some of the spending will be on traditional ad flights, McDonald’s says it is looking for multiyear partnerships as well. The move will help those diverse-owned media companies have a more sustainable business model where they can bank on long-term growth. For McDonald’s it will offer the opportunity to embrace more inclusive storytelling that leads to a better connection with the audiences. That could mean not just radio buys promoting the dollar menu, but also a companion podcast that addresses an issue in the Black, Hispanic or Asian community.
“With this latest move, we’re taking action to advance diverse-owned companies across the marketing supply chain,” said McDonald’s Chief Marketing Officer Morgan Flatley in a statement. "We're using our resources to support these platforms and businesses, which keep the brand at the center of culture while creating deeper relationships with our diverse customers, crew and employees."
McDonald’s also said it will form an advisory board of outside marketing and advertising professionals to help it identify the biggest barriers to economic opportunity facing its media partners and how to use the company’s collective resources to get behind new programs and initiatives to eliminate them.
Unlike menu changes that often rile McDonald’s franchise owners, the group has announced it is on board with the marketing reallocation.
McDonald’s move is part of a growing trend in the ad community. General Motors, which uses Carat for media buys, has promised to increase ad spending on Black-owned media from its current two percent to four percent by 2022 and eight percent by 2025.
Last month, GroupM formed the Media Inclusion Initiative, an integrated investment strategy to support and grow diverse Black-owned media companies and creators. The program pushes clients to spend at least two percent of their budget on Black-owned media.
In March, IPG Mediabrands held the ad industry’s first Equity Upfront allowing Black-owned and Black-focused media companies set to pitch large brand advertisers And in February the ad agency network Dentsu launched Project Booker, which was geared toward brands creating new content and sponsorship opportunities tying marketing strategies to Black-owned radio.