Burger King’s Struggling. Is Their Ad Agency to Blame?

Is the bizarro King overdue for a dethroning? That’s the contention of The Atlantic’s business blogger, Derek Thompson. Citing the fact that Burger King has increasingly lost ground to McDonald’s and Wendy’s since the advent of Crispin’s surreal “King” marketing campaign, Thompson concludes that ad push isn’t working:  

“To the surprise of nobody, Burger King’s horrible, creepy advertisement campaign is not working, and the company finds itself falling further behind McDonald’s according to just-released figures. This strikes a huge blow to the idea that what Americans want from their fast food joint is a Bobblehead King doll who sneaks into your bed, raps about square butts, and terrorizes you from outside your bedroom window. Yes, those were advertisements for hamburgers.”

“In other words, thank you America, for compelling our elites to put the strategicback into strategic advertising.”

Gawker is also piling on. But not so fast. The Ad Age article that’s got them both shouting “A-ha!” actually paints a more subtle picture (despite its attention grabbing headline):

“The argument can be made, moreover, that BK was at the right place at the wrong time. Eyeing higher profit margins, BK focused its marketing guns on more expensive items targeted to so-called super fans, young men who theoretically care more about how “Meat’Normous” a burger is than how much it costs and who tend to be the most vociferous fast-food consumers. A smart strategy — until BK got caught flat-footed by a recession that played to McDonald’s sweet spot: the value proposition it clearly owned and had honed over decades.”

“And so the creative approach that put BK on the advertising map for the first time in years seems to have been reconsidered of late as the chain runs spots promoting its $1 Whopper Jr. in heavy rotation. “The mistake BK would readily admit now is that they didn’t promote [value],” said Morgan Stanley analyst John Glass. “That’s why they’re playing catch-up now.”

Before continuing, I should say a couple things in the interest of full disclosure: In 2003, before I began working in journalism, I was an analyst on the leveraged buyout deal for Burger King. Crispin was hired after I finished my work there, but I did work on the team that was turning around Burger King’s marketing–specifically, on its product innovation, not its advertising. I have had no contact with Burger King or my former buyout-industry employers in over five years.  

With that out of the way, I want to point to the most salient fact about the fast food industry that Ad Age, Gawker, and The Atlantic missed: Advertising is a weak lever to effect change in a sprawling, franchised operation like Burger King. Why? First off, one of McDonald’s historically brilliant moves was to own the land that its franchises sit upon–and to lease that land back to the franchise operator. Burger King–and most of its other competitors–don’t have that arrangement. And that matters because as the land owner, McDonald’s has leverage in redesigning its stores that its competitors sorely lack. Witness how well McDonald’s is overhauling the design of its stores, and how lackluster those efforts have been at Burger King and Wendy’s. Granted, part of that problem is that Burger King needs to hire better designers–as these hideous designs prove–but the fact remains that they can only do so much. Moreover, restaurant placement is also vitally important, and McDonald’s has the best land in the business. 

Source: FastCompany