McDonald's wireless hook

Mary Dillon uses Web, text messaging, podcasts to lure YouTube generation

April 21, 2007|By John Schmeltzer | John Schmeltzer,Chicago Tribune

CHICAGO -- In a little more than 18 months, Mary Dillon, athlete, marathoner and the mother of four children, has taken the world's largest hamburger chain to venues its founder Ray Kroc could not have imagined.

While Dillon, 45, who was named executive vice president and global chief marketing officer of McDonald's Corp. in September 2005, hasn't yet run a guerrilla marketing campaign, she has introduced the buttoned-down company to YouTube, Webisodes (short Web-based episodes), cell phone text messaging in Japan and podcasts, all places where its young adult and "forever young" customers now are found.

"It creates buzz and fun about the brand," Dillon said.

While Dillon is not reinventing the "I'm lovin' it" marketing message made famous by her predecessor, Larry Light, in 2003, she is tweaking how that message is getting to the fast-food giant's customers by crafting campaigns for the Internet, mobile phones and other alternative outlets.

She has also expanded the company's licensing brand strategy, breaking away from Disney movies to make promotional deals for coming films such as Shrek the Third.

She refers to the strategy as the "I'm lovin' it" next-generation program.

Dillon, who is out the door at 5:30 a.m. each day, in the gym at McDonald's Lodge by 6:15 a.m. and at her desk by 8 a.m., is part of a group of seven outside senior executives who were hired in the past five years to shake up the business and, in the process, pave the way for 48 straight months of higher sales from its established restaurants, its longest such streak since 1980.

In so doing, the company's stock has nearly quadrupled in value, rising from a close of $12.38 on March 12, 2003, to yesterday's close of $48.36 on the New York Stock Exchange.

Yesterday McDonald's reported that first-quarter earnings climbed 22 percent to $762 million, boosted by surging sales in Europe and strong demand for its new U.S. menu items.

The fast-food leader also said it will sell nearly 1,600 restaurants in Latin America and the Caribbean to a franchisee, easing its exposure in a tough market and netting it $700 million.

Dillon controls a marketing budget that exceeds the $1.8 billion in revenue at Quaker Oats Co., where she was president before being lured to the Golden Arches' Oak Brook, Ill., headquarters.

While a guerrilla marketing campaign such as one by the Cartoon Network that riled Boston police this year isn't in the cards right now, Brian Williams, president and chief executive of Element 79, a Chicago-based advertising agency, wouldn't be surprised if one emerged.

"She likes trying new ideas as long as it doesn't hurt the brand," said Williams, who has known Dillon since her days at Quaker.

Such was the case last spring when Dillon, in a bid to tap into the growing popularity of personal advertising, invited McDonald's customers to apply to have their faces and stories plastered on the chain's food bags. Millions across the world took a look via the Internet, while more than 13,000 applied for the 24 spots that offered a trip to London and a brief chance at immortality.

Dillon also has moved away from Disney movies and made promotional deals with Sony and Dreamworks for coming films such as Shrek the Third, Surf's Up and Bee. And she is monitoring a McDonald's U.S.A. program that invites mothers to become McDonald's correspondents reviewing the quality of the company's offerings.

"Honestly, from what I know about McDonald's, I was surprised" when they hired her, said Margaret Stender, president and chief executive of the Chicago Sky, Chicago's WNBA team.

"But if you are going to bring someone in from outside and bring in someone who is able to make change in a non-adversarial way, she's the real deal," Stender said of Dillon, who has known her since the day Dillon started at Quaker in 1984.

Dillon is among a handful of executives, including Chief Financial Officer Matthew Paull, who can walk unannounced into the office of James A. Skinner, McDonald's chief executive. Her office is four doors from his.

Since joining the company, Dillon and her team of marketers have shifted the focus of the "I'm lovin' it" slogan from the personal "I'm" at the beginning to the "it" at the end, in an effort to bring attention to McDonald's increasingly healthful menu items.

Supporters and critics alike say she has made the shifts without tinkering with the core of the "I'm lovin' it" slogan.

"Larry was a great turnaround leader and left us with a strong legacy and asset" in the slogan, said Eric Leininger, McDonald's senior vice president for global consumer and business insights.

"Mary is a long-term builder who is really going to bring our brand to a place it has not been before."

John Schmeltzer writes for the Chicago Tribune.

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