Revolutionizing Marketing: McDonald’s Launches New Digital Fund for Expansion and Competitive Advantage

McDonald’s is set to launch a new digital marketing fund in an effort to expand its digital business and increase its competitive advantage. The move was announced in a memo viewed by CNBC, which outlined the company’s plans to invest hundreds of millions of dollars into its loyalty program and add new ordering channels.

The change is aimed at modernizing the company’s marketing strategy and increasing its competitiveness in the fast-food industry. U.S. franchisees will be required to contribute 1.2% of projected identified digital sales starting next year, with this rate adjusted annually based on projections made at the beginning of each year. This shift is expected to result in an increase in cash flow for each U.S. restaurant of around $2,600 starting in 2025, as the digital investment costs will shift from a franchisee’s profit and loss statement to the marketing contribution.

In addition to U.S. franchisees, McDonald’s operators in the U.K., Canada, Australia, and Germany will also contribute to the global digital marketing fund, with other markets expected to follow suit later on. The shift in funding is likely to result in a reduction in traditional marketing tools like TV commercials, as McDonald’s focuses more on digital initiatives that directly drive sales.

McDonald’s has already seen significant success with its loyalty program, with over $6 billion generated by loyalty program members globally during the first quarter alone. In comparison, Chipotle Mexican Grill has 40 million loyalty members while Starbucks has 32.8 million loyalty members worldwide – making McDonald’s one of the largest players in this space with a goal of reaching 100 million loyalty program members by 2027.”