Brief

McDonald's orders early end to long-standing Olympics sponsorship

Dive Brief:

  • McDonald's has ended its sponsorship of the Olympic Games, a partnership which began in 1976, according to CNBC. The deal was scheduled to last through the 2020 Tokyo Summer Olympics but is being shortened as the brand shifts its strategy; however, McDoanld's will remain a sponsor with domestic marketing rights for the 2018 Pyeongchang Winter Olympics.
  • McDonald's has been reducing costs recently and is enacting a global growth plan with different priorities, Global Chief Marketing Officer Silvia Lagnado told CNBC. McDonald's new focus, along with cost savings, includes improving food quality, restaurant service and online ordering to boost flagging U.S. sales
  • The fast food giant was previously part of the International Olympic Committee's (IOC's) top sponsors program and contributed more than $1 billion to each four-year Olympic cycle. No replacement has been named by the IOC, CNBC reported. 

Dive Insight:

McDonald's truncating its Olympics partnership points to how even some of the most formidable global brands are enacting belt-tightening measures and realigning priorities as they face continued market disruption. McDonald's place on the IOC has always been a bit controversial, per CNBC, as McDonald's doesn't necessarily serve healthy foods associated with athletes — an image it is looking to change with its growth strategy pivot. 

Fast food and quick-service restaurants are often painted as struggling to capture the attention of younger demographic groups, who demand healthier eating alternatives, and McDonald's found, in a memo leaked last year, that only 20% of millennials had ever tried its signature Big Mac burger. While that might sound like a small issue, it spurred the brand to beef up its social media staff in order to strengthen youth outreach, and McDonald's has since weathered more significant changes to its corporate structure.

In April, McDonald's saw a major shakeup at the top of its U.S. marketing team with the departures of U.S. CMO Deborah Wahl, along with Lance Richards, head of U.S. menu, and Julia Vander Ploeg, head of U.S. digital. New frontiers for the brand include more mobile ordering and delivery, as evidenced by a growing business with UberEats.  

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