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McDonald's to Double Advertising Spending to Diverse Media

By Dieter Holger

 

McDonald's Corp. will more than double its advertising dollars to diverse-owned media companies after the fast-food giant boosted marketing to help recover from the pandemic.

The Chicago-based company said Thursday that its advertising spending will increase to 10% from 4% between 2021 and 2024 to platforms owned by groups including Black, Hispanic and Asian Pacific American people, women and LGBT people. For Black-owned properties, spending will rise to 5% from 2%.

It will also form an advisory board of advertising and marketing experts to identify "the biggest barriers to economic opportunity facing diverse partners and putting collective resources behind new programs and initiatives to eliminate them," McDonald's said.

"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," said Morgan Flatley, chief marketing officer at McDonald's.

McDonald's is among the many companies that have pledged to put more money behind minority-owned businesses following racial unrest that rocked the U.S. and U.K. last year. In early April, General Motors Co. said it would allocate 4% of its U.S. advertising spending to Black-owned media companies by next year and boost that level to 8% in 2025.

Last week, The Wall Street Journal reported that Japanese advertising company Dentsu Group Inc. launched a stand-alone division to help connect minority-owned companies to ad buyers looking to direct more dollars to such firms.

Advertising spending fell at many companies during the pandemic. In February, McDonald's said in a filing that advertising costs included in the operating expenses for company-run restaurants fell to $325.5 million last year from $365.8 million in 2019, primarily due to lower sales because of the pandemic. Still, it spent more than $200 million in marketing last year to drive recovery for franchises.

In the first quarter of this year, McDonald's sales rebounded from the pandemic and beat expectations, buoyed by new menu items. McDonald's reported sales of $5.1 billion for the quarter ended in March, up 9% from a year earlier.

McDonald's ranks fourth among 67 global publicly traded restaurant companies for its management of environmental, social and governance issues, including disclosures and programs, according to the WSJ ESG scores.

 

Write to Dieter Holger at dieter.holger@wsj.com; @dieterholger

 

(END) Dow Jones Newswires

May 20, 2021 05:15 ET (09:15 GMT)

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