McDonald’s will need to focus on trust to make its Omnicom deal a success
Earlier this week, McDonald’s revealed details of its ‘payment-by-results’ contract with Omnicom. When the fast food brand originally started its search in May, its contract requirements led to an industry-wide uproar.
The winning agency would be asked to operate at cost, and would not profit from this base pay. Any profit the agency will make will come from performance-related pay.
Yet Omnicom went with it and won the account, ending McDonald’s 35-year relationship with Leo Burnett in North America. While the rewards might seem clear from a client point of view, for agencies it’s less straightforward.
At the time of the pitching process in May, Paul Bainsfair, director general at the IPA, told Marketing Week: “This seems like a process likely to lessen the chance of McDonald’s finding the right agency partner. Given the importance of advertising to this brand, it’s hard to understand why the company would set criteria for selecting an agency that makes an optimum outcome highly unlikely.”
Nevertheless, others have argued that provided the client chooses the right metrics and sets the right levels of reward, there are upsides for the agency.
“I am a big fan of performance numeration models, and believe it should be standard best practice. With these types of contracts agencies have a much higher accountability for the success of the campaign,” says Vladimir Komanicky, managing partner at Oystercatchers. “
If you have such a deal in place, it needs to be set up in the correct way and clients should manage that agency in the same way they’d manage their own team. You have to continually discuss what is going well and what isn’t.”
Amazon brings instant home shopping to the UK with Dash launch
Amazon scrubbed up well this week with the launch of its Dash button service in the UK, a service that allows customers to order and restock products instantly, with the single push of a button.
The service is part of a partnership with numerous FMCG and food giants such as Procter & Gamble and Nestlé and will permit amazon Prime members to buy ‘Dash Buttons’ for £4.99, for a variety of household brands including Ariel, Fairy, Kleenex, Olay, Gillette, Rimmel and Nescafé.
Setting up a Dash Button requires customers to connect it to their Wi-Fi connection and then use the Amazon app to select the product they want to reorder. They can then place the button anywhere in their home and tap it to place an order. Customers then receive a mobile notification confirming the item with a delivery date and price.
“Dash Buttons offer the convenience of ‘one-click’ shopping from anywhere in the home. Just press the button and your item is on its way,” said Daniel Rausch, director of Amazon Dash.
Diageo hits back after ‘irresponsible’ Captain Morgan ad banned
Diageo’s Captain Morgan brand came under fire this week after the ASA banned one of its TV ads for implying that alcohol could enhance an individual’s popularity and “personal qualities.”
The TV ad, which aired in May, shows a party on an old-fashioned wooden sailing ship. A man with Captain Morgan’s face superimposed over his own was shown dancing with friends and using a rope to swing from one deck to another.
Meanwhile, on-screen text stated “Captain the dance floor” and “Captain the night”. A range of Captain Morgan products appeared alongside text stating “Live like the captain”.
The ASA said: “Although the ad did not explicitly depict drinking alcohol as resulting in a change in the central character’s behaviour in a ‘before and after’ scenario, we considered that the superimposed Captain Morgan face implied that he had already consumed the product and thus linked his confident behaviour to this consumption.”
Not everyone was impressed with the verdict, however. Julie Bramham, European marketing director at Captain Morgan, argued that while Diageo is “pleased” that the ASA chose not to uphold part of the complaint, it disagreed with its interpretation of the rest of the ruling.
River Island on how its ‘Snapchat first’ campaign can make the store experience ‘fun again’
This week Marketing Week spoke to River Island about its ‘Snapchat first’ campaign to launch bespoke branded filters that can only be accessed when entering one of its stores.
The high street retailer, which launched its first TV campaign two years ago, said it is hoping a renewed focus on marketing and a new partnership with Snapchat can help it stand out amid growing high street competitiveness.
Customers are invited to visit one of more than 280 River Island stores, with the best subsequent use of the filters – which are designed to convey cultural messages that change with the fashion seasons – on social media resulting in potential prizes such as a £1,000 shopping spree.
There has been a wave of brands turning to Snapchat over recent months. However, River Island’s marketing director Josie Roscop said the key to success is to use Snapchat in a way that ties together both the social and physical worlds.
Roscop told Marketing Week: “The great thing about Snapchat is that it is embedded on your phone and makes great use of location-based technology, which is why we thought it would be perfect for a store-based activation.
“Yes [driving sales] is an element but we’re not expecting this to drive massive levels of footfall. It is more about getting our customers to engage with the brand and share their opinion in a way that merges both digital and offline. For some, this type of activity can make the store experience fun again.”
Brits ‘less afraid of Brexit’ as consumer confidence bounces back
According to GfK’s latest consumer confidence index, British consumer confidence is bouncing back following the vote for Brexit.
British consumers’ propensity to make major purchases rose nine points in August to +7. Although this is 10 points lower than in August 2015, it represents a major improvement on July’s score of -2.
The core consumer confidence index also increased by five points to hit -7 as positive growth was recorded across all the major measures.
Joe Staton, head of market dynamics at GfK, said the figures are a “stark contrast” from July, when consumer confidence saw its biggest drop in 26 years. He said August’s figures prove Brexit fears are easing and that the public is thinking more rationally.
“The public is now thinking more rationally after a period of such dramatic uncertainty,” he said. “Yes, Brexit fears will continue but people have calmed down quite a bit.”
The index measuring consumers’ feelings towards their personal finances over the next 12 months rose five points in August to 4; this is only two points lower than August 2015. And this could be good news for brands.