CHICAGO — McDonald’s has decided it takes a global holding company to sell a Big Mac.

After nearly two years of splitting its advertising business between Leo Burnett and DDB Chicago, the hamburger giant has enlisted Publicis and Omnicom, the respective parent companies of the Chicago agencies, to compete for the whole enchilada.

Last week, Paris-based Publicis and New York-based Omnicom did just that, with multiple agencies under each corporate umbrella pitching coordinated, all-encompassing marketing campaigns, according to sources familiar with the situation.

Everything from creative to digital to in-store marketing is up for grabs, with a holding company expected to be chosen by next month, sources said. The competition is winner take all.

Media buying was the only major ad agency function not in play, and will remain with Omnicom’s OMD, sources said.

First prize is nearly a billion dollars in annual advertising business, while second prize will likely mean layoffs. With Leo Burnett and DDB Chicago part of McDonald’s advertising strategy for decades, Chicago will likely remain integral to the holding company campaign going forward.

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The holding company advertising competition is being directed by McDonald’s Chief Marketing Officer Deborah Wahl, who has been with the world’s largest burger chain since March 2014. A request for proposals went out two months ago, with WPP, the world’s largest advertising holding company, declining to participate.

Some high-level marketing executives at the fast-food giant may be participating in a voluntary buyout, according to sources. That process may slow the advertising decision.

McDonald’s said it is “evaluating Publicis and Omnicom, and the process is ongoing.”

McDonald’s has been in the midst of a transformation since hiring CEO Steve Easterbrook in March of last year. It has cut down a bloated menu, improved order accuracy and cut down wait times, leading to improvements in customer traffic and satisfaction. The introduction of all-day breakfast last fall has been heralded as a spark to momentum across the company. Easterbrook promised that “nothing is off the table” when it comes to change at the company, acknowledging the chain in the past has been slow to adapt to its customers’ needs.

McDonald’s made its biggest move yet when it announced last month that it will move from its suburban Chicago headquarters to a new building to be constructed on the site of Oprah Winfrey’s former Harpo Studios in Chicago.

“Clearly it’s been one of (Easterbrook’s) chief mandates to get the entire system aligned, having one vision, streamlining and simplifying,” Morningstar analyst R.J. Hottovy said. “A lot of the most important things the company needed to remedy have been improved. Now the key is sustaining that process.”

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Having one voice for its advertising message is a big part of that, Hottovy said, especially in the critical second year of McDonald’s transformation.

“At some point, too, you’re going to have to take a bigger bet on something to catch consumers’ curiosity and interest,” Hottovy said.

McDonald’s spent about $196,000 on print, broadcast and digital advertising in the first three months of this year. It spent $823,665 last year, down from $939,873 in 2014, despite an investment to promote the launch of all-day breakfast in October.

DDB Chicago has been the lead agency for McDonald’s U.S. advertising since 1997, when it first won the business from Leo Burnett. Last year, Leo Burnett was brought in to create a campaign to refresh McDonald’s famous slogan, “I’m lovin’ it.” The campaign included a 60-second Super Bowl ad for McDonald’s, marking the burger chain’s return to the big game after several years of sitting out.

DDB predecessor Needham, Harper & Steers created the iconic “You Deserve a Break Today” campaign in 1971. Leo Burnett won the McDonald’s account in 1981, but DDB eventually reclaimed its status as lead agency.

In 2014, Leo Burnett was dropped as the longtime local ad for McDonald’s Owner/Operators of Chicagoland and Northwest Indiana. Cossette, McDonald’s lead creative agency in Canada, opened an office in Chicago and took over the local business.

Leo Burnett’s other clients include Allstate, Kellogg’s, Coca-Cola and Samsung. DDB Chicago’s clients include Jeep, State Farm and Capital One.

Omnicom and Publicis scuttled a planned merger in 2014 that would have created the world’s largest advertising agency.


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