McDonald's has consolidated its creative agency business with Omnicom Group in an effort to create a dedicated agency group and bring its media and creative accounts under the same roof.

After a closely watched review, the change ends the fast-food giant's 35-year-long relationship with Publicis Groupe's Leo Burnett agency in the U.S.

Omnicom will be McDonald's new partner for all of its U.S. national marketing initiatives, Deborah Wahl, chief marketing officer of McDonald's USA, said in a statement. Omnicom will work with McDonald's to build a new "agency of the future," she said.

"Part of building a better McDonald's means not only making changes to our food and our restaurants but also how we conduct business," Ms. Wahl said. "In selecting this agency we will have access to top talent, technology and thinking with digital and data at the core."

The move brings all creative and media together within Omnicom, the holding company giant that owns DDB, the creative shop that has worked with McDonald's for 45 years, and OMD, the restaurant chain's media agency. It also makes it easier for the holding company to pool resources to create a dedicated unit—a trend as clients look for more cost-efficiency and consistency across traditional and digital advertising.

"This new model will, over the next few years, create great work at the speed of the marketplace at an efficient cost," Ms. Wahl said in the statement.

Publicis' Leo Burnett and Omnicom's DDB were the main incumbents. Both holding companies created teams with resources from multiple shops, according to people familiar with the matter. Publicis' team included tech shop SapientNitro.

McDonald's spent $820 million on U.S. advertising in 2015, according to Kantar Media, which doesn't count some forms of digital advertising.

McDonald's joins the many marketers, including Harley-Davidson, Target and MetLife, that have cut ties with long-term agency partners in recent years.

Consultancy The Bedford Group issued a report a few years ago showing that the decrease in relationship tenure between marketers and agencies didn't happen overnight. According to the report, the average client-agency relationship tenure was 7.2 years as of 1984 but had declined to just 5.3 years by 1997. As of a few years ago, the average tenure was "thought to be less than three years."

While the McDonald's decision is a big loss for incumbent Publicis, it's good news for the creative team at DDB and DDB's chairman emeritus Keith Reinhard, who was behind the famous "You Deserve a Break" tagline and catchy "Two-all-beef-patties-special-sauce-lettuce-cheese-pickles-onions, on a sesame seed bun" song.

Leo Burnett was behind the famous "Nothin but Net" ad in which Michael Jordan and Larry Bird compete for a Big Mac.

Despite the agency change, the "I'm Lovin' It" tagline will live on, McDonald's said.

McDonald's has been trying to find a way to continue to grow sales after an initial bump from all-day breakfast offerings started to cool. The fast-food chain is experimenting with new products in different markets and new ways for customers to order and pick up meals.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

 

(END) Dow Jones Newswires

August 29, 2016 15:15 ET (19:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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