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Mixed Signals from Semafor Media
Marketing pro Tariq Hassan on how McDonald’s embraced its Donald Trump drive-thru moment
00:53:36
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- [00:11]
A
Welcome to another episode of Mixed Signals from us here at Semaphore where we are talking to all the most important and interesting people shaping our new media age. I'm Max Tawny. I'm the media editor here at Semaphore and with me as always from across the world. This week he's in Riyadh is our editor in chief, Ben Smith. Ben, you were in Davos for last week's episode. This week you're in Riyadh. Where is it next week? Where's it going to be? Are you ever coming back or are you just a citizen of the globe now?
- [00:41]
B
No, I'm rushing back to Washington so I can prep with you for our media summit later this month.
- [00:47]
A
That's right. Stay tuned for that. Well, Ben, with Super Bowl Sunday coming up this week people will be watching football. Many people will be watching football. A lot of people will also be watching a lot of television ads too. Super bowl advertisements are still a tremendously big deal. People are actually paying more for super bowl ads even though fewer people are watching. So this week we have a Super bowl themed adjacent guest. It's Tarek Hasan. He is the former chief marketing officer of McDonald's. And Ben, you know Tarek a little bit, you were interested to have him on to talk about advertising. What's changed? What are you curious to ask Tarek about when he comes on the show in a few minutes?
- [01:27]
B
Yeah, I mean, I just think that, you know, we're in this funny moment when television has been pronounced dead many times and yet people are spending $10 million for 30 seconds on the Super Bowl. And he's someone who, you know, he's like a kind of an icon in the marketing business. He's operated very, very high level and very well regarded by his peers. But also kind of over the course of he was I think at McDonald's for four or five years. You know, saw was there as the industry changed from where the people who make the ads to we're really part of the tech industry to some degree and we're trying to get kind of deeper and deeper into customers lives. And I guess I'm sort of interested in kind of what even is that business now.
- [02:04]
A
Right. Interestingly, it actually became news when Tarik was CMO and McDonald's decided not to buy a Super bowl ad and maybe not instead. But at the same time were increasing their focus on advertising, driving people towards and within this McDonald's app, which now has like 100 million people on it, which is a truly astounding number I mean, how many people have Twitter on their phones? It's probably gotta be more with the McDonald's app, right?
- [02:32]
B
Least way more, I would think. I mean, that's like almost as many people as listen to Mixed Signals.
- [02:37]
A
Yeah, yeah, it's in the same. It's in the same ballpark. Well, we have a lot more that we want to get to with Tarek. We want to ask him about the value of television advertising at a time when many people are cutting the cord, whether super bowl advertising is worth it, if he is sick of all the celebrities who are spokespeople now on super bowl ads, or if he thinks that's great. And of course, what happens when someone who wants to be president of the United States shows up at your business and is all of a sudden associated with your brand? That is something, of course, that he had to deal with directly when Trump showed up and served fries and various other things from the McDonald's. But we have a lot more that we want to get to at Tarek right after this.
- [03:21]
B
Hey, Mixed Signals listeners. If you have, like me, spent a bit of time listening to marketing podcasts, you will know that many of them are just a bit too on message filled with PR fluff and recycled talking points. That's why I'm excited by a new show from our generally quite blunt friend Josh Spanier, Google's VP of marketing. It's called Frontier cmo. It's from Think with Google. Josh is hosting unfiltered, honest conversations with the most disruptive minds in marketing and tech about what's really happening with what's failed, what's next, and the truths you need to know to stay ahead. These are your notes from the Frontier search for Frontier CMO from Think With Google, wherever you get your podcasts or watch on YouTube. Tarek, thank you so much for joining us. And we are like, so glad to have a big shot CMO who is also at least temporarily sort of off the chain without the burden of messaging. That makes CMOs sometimes a little bit of a tough interview. And so we expect lots of candor and really appreciate your coming on.
- [04:26]
C
It's great to be here, Ben. I think most people that have worked with me over the years would tell you that the Candor gear only goes up slightly versus when I'm in a role. So it's great to be here because I'm pretty candid.
- [04:39]
A
Ben, that sounded kind of like a threat a little bit.
- [04:42]
B
Oh, I was actually worried that it sounded like I was perhaps slightly insulting some of our CMO friends who were more tightly wounded.
- [04:50]
C
I think you're fine.
- [04:52]
B
Okay. Okay. Well, in any case, we always talk about advertising and marketing the Friday before the super bowl, which is also the super bowl of the media and marketing industry. And we're really interested, I think, in grilling you about the future of advertising, but did want to start there. And this question of, is the super bowl still this utterly central thing in the marketing industry? And I guess to begin with, was it you were at McDonald's making a couple of big super bowl ads. Was that the pinnacle of that work and what was that like?
- [05:25]
C
Look, I, I think you start with the super bowl itself, right? And the event itself. There's no question it's still a massively culturally relevant event. I think it's one of the few massive appointment tv, you know, events that still takes place, that revolves around a social environment. I think what's changed around it is the conversation you and I are having. You know, back when I was first in the industry, this was when we were talking about it. Right. The Friday or the Saturday or the Thursday before the game. Today, I think that component of it has changed. Right. We've probably even starting to talk about the super bowl for a few weeks. You get, you know, both lead ups to it as well as reveals of work prior to this rule, because I think there's no question its cultural relevance and its audience relevance still exists, even by the numbers. Right. If you look at the viewership, it continues to, to grow. And I think this year will be no different. You've got a great game lined up. It always comes down to the quality of the game. I think what's changed is the strategic usage of the game for marketers. And I think that has shifted a little bit from what was once upon a time a ta da moment. The premiere of Just Ad Only has demonstrated there's no place that isn't left open to the full integration of how you approach your marketing, not just specifically around an ad, but how it ties into your overall marketing strategy.
- [06:45]
A
I was reading before in our show notes that Ben and Josh, our producer, put together that actually it was a story. When you were CMO of McDonald's and you guys actually decided not to do a Super bowl ad one year this essentially made news. What was the decision behind why you decided not to do a Super bowl ad? And also, did you just think to yourself, wow, this means that I have $8 million or $10 million that I can play with in some other arena or do something else kind of creatively.
- [07:13]
C
With I mean, isn't it funny how we get so used to the perennials showing up that when they make a change to their strategy on a given year, that in itself becomes a story? I mean, the irony is McDonald's has never been by definition considered an in the super bowl game advertiser. When I worked there, and even previously the spot that was always held was the spot that was right before the kickoff. And by definition, even by the meters and by the measuring the industry, that was never considered an in game spot. So you were considered a spot leading up to. But Max, to answer your question, look, I think it came down to what all good marketers have to take a look at was did the dollars and cents of the usage of that for that year make sense? And it would happened at a pivotal time that we decided at the time there were some strategic priorities that when we added up the whole list of things that had to get done for the year and you know, even a big brand like McDonald's, you still have to make some choiceful decisions. It came down to some tough decisions around was that actually going to be the best use of the spend for the year, given the priorities that both the business and the franchisees needed to achieve that year. And we collectively made a decision, although being a hard decision, emotionally difficult, but rationally it was quite an easy decision that year to decide that we weren't going to put that same investment in given the other priorities we had on the year. It was further enabled by the fact that our location, unbeknownst to us, had been sold. And so there was a little bit of a rationale that like, okay, so we don't even have our usual spot area. And you know what, when I look at the grocery list of everything else we have to get done, that one needs to stay on the shelf this year. We got other things we need to do.
- [08:58]
A
Last year for our super bowl episode, we had the CMO of Instacart on and it was their first super bowl ad. And she was talking about how nervous she was to pitch it to their CEO and to, you know, write the check. Spending the money on strikes me that there's like a lot of emotion wrapped up in this for people in your position, people who have the opportunity to do these super bowl ads, to buy these ads, to create them, to run them. Why is that? Is it just because there so many people watching and am I wrong that it seems like there's that I'm picking up on some emotion here from. From folks in your position.
- [09:35]
C
Yeah, I Mean, what you'll notice what I said to you was it was an emotionally difficult decision for us to not do it. And that was again, because of that familiarity. I can't, I don't recall how many years the brand had been on. And so to emotionally not show up, you know, you're managing not only your customer base, but you are managing a very proud system that is used to having, you know, the golden arches in the game for that many years to not be there. And you saw I created an article that's always something to manage. Like, I think the nervousness that you mentioned around anybody who's doing their first one or who's with a company where the disproportionate amount of money and investment that's required to do a Super bowl ad is, you know, disproportionately significant for them. Marketing is a hard thing to do in general in an organization without lots of inputs and lots of, you know, feedback into what you should be doing around the super bowl that just grows exponentially both internally and what you do to make sure the organization is going to feel good about being on that kind of stage in the way they show up. And then as you guys know, and I think it's probably a little less so these days. You guys tell me if you feel different. You know, the Monday morning USA Today ad meter and, you know, the ranking was like a, you know, live and die by what you actually did. I don't think that's quite the case today. And I think part of it's because so many things lead well before the Super Bowl. And I also think it's because smart marketers are not doing just the ad for the super bowl that's linked to some broader story. And so quite often we're thinking about the broader context of it. But sure, I think anytime you take an organization resources and that kind of funding and spending, I think, I'm not really sure how it's any different than the total of what you spend across the other 360, you know, 364 days a year. When you roll that all up, it's still significant dollars, but I think it puts a spotlight on it for, for leaders.
- [11:26]
A
Did you ever get a bad review on the USA Today ad meter? And, and if so, what was that like?
- [11:34]
C
You know, I'm, I can fortunately say I've, I've never had an ad that tanked.
- [11:41]
A
Really?
- [11:42]
C
Yeah. No, I mean, honestly, I mean, the reality is when you actually think about how many ads are on the super bowl, most People in their career don't have a long list to begin with, but I never had anything that I would say fell like sub 15, which, you know, I, I, but again, I gotta tell you, I've never also really marked the success of a brand by where we showed up on one given, you know, ad rating versus the totality of what we put together for the year and the totality perception of the brand and ultimately more importantly, the, the impact on the business. Right. And so I definitely have some ads in my past that might not have made the super bowl that, you know, necessarily weren't the greatest ads. But no, thankfully I've never produced a Super Bowl Monday morning joke, if you will. I think some ways those are more enjoyable than the top ads to hear what people think about the ones that, that missed the mark. It's hard though, right?
- [12:36]
B
Yeah. You know, we talk all the time on this show about how sort of everything is becoming television, you know, and the sort of business of print media, podcasts, you know, anything that used to be text or audio seems to be converging toward these visual media, which I think also means a lot of marketing in some ways is coming back to some of the values of TV advertising. And I wonder, and when I saw the super bowl was people were paying $10 million for 30 seconds. Particularly as a guy who, who has chosen at times not to go there, do you think is there like a swing back to this, you know, kind of to these more traditional media in a way?
- [13:12]
C
Look, I think you step back from media, I think what we're seeing is a cultural shift back to the aspect of, in real life. Right. We're seeing that beyond marketing. Right. We're seeing that with the festival culture like experiential and, and we know this is true particularly with Gen Z, the in real life moments and the in real life elements have become more real again. I actually think that when you think about what's happening with AI and having to figure out how to deal with large language models and everything, I actually think it bodes very well for the importance of storytelling. So whether you call it tv, visual advertising or not, I think what we're actually seeing is a resurgence of actually getting back to telling stories. And as a result of that, of course, when you can put visuals and audios to it, I think that plays out in a really positive way for brands. So I think as brands start to recognize the challenge of breakthrough, you can't just spend your way there anymore. So I have to and not just break through for the moment. I got to get drive engagement. I drive engagement now through finding a way to actually tell a story that you're interested in. And I think that's what's helping propel it.
- [14:20]
B
Well, we'll get off the super bowl in a second, but any. Anybody you see this year doing something that's really caught your eye in the run up.
- [14:27]
C
Look, I'm looking forward to seeing where Uber Eats is going with their teasers. I got a taste of the. Of Doordash's clear sort of response to where they're going with it ahead of time. So there's clearly the, you know, food delivery war is on. Very clearly. You know, if you look over the last few years, look kind of a disproportionality of how much the studios were showing up in terms of movie premieres and streaming premieres. I'm looking forward to seeing, like, do we see more categories show up? Because I think over the years there had been fewer and fewer categories. So I think to your point, if we're seeing a resurgence, I think the indicator for that is to see the breadth of categories. I also think the audience expansion that's happened with the NFL in general, and kudos to that team because I think the breadth of that viewership has really expanded, both by gender and age. So I'm looking to see does that start to show up in the marketing that shows up.
- [15:21]
A
Tarek, I can. I just need to ask kind of what feels to me like a. Like an old man, a grumpy old man question. How do you feel as a marketer about all of these brands just leaning into a list celebrities, and just every single year, all ads are just all celebrities cashing in. We've seen it, you know, we've seen it get even crazier this year with this new Jurassic park ad, which D aged Laura Dern, you know, and some of the cast. Jeff Goldblum, what do you think of as a marketer? Do you think that that's lazy?
- [15:52]
C
Look, I. I believe there's sort of two buckets. I don't think it's actually a conversation of celebrity or no celebrity. I always think this question comes down to how to do it well and maybe how to do it not as well. And for me, that actually doesn't come down to the celebrity themselves. It comes down to the reason why. Right. Is there an authentic rationale and reason and a connection with your meaningful, authentic connection with your brand, your audience, and that celebrity? So in the case, I'll go Back to the McDonald's examples. You gu guys brought up earlier, we never worked with a celebrity where we didn't actually find that intersection. We, you know, of them as a fan, we always said we didn't. We didn't really work with celebs. We worked with people who were already fans of the brand. So all of those celebrity meals we did, we didn't make those up and ask them to show those were their order. Right.
- [16:44]
A
The.
- [16:44]
C
Even the adult Happy Meal that we did with Cactus Plant Flea Market.
- [16:49]
A
Yeah.
- [16:49]
C
Before we decided to work with her, there's a conversation with her and in fact, if you go back to that. That meal, it was her idea to bring back the McDonaldland characters. Because when we talked to her about doing the Happy Meal, she said, Look, McDonald's for me, when I was younger, that was my third space. I was where I'd go and hang out with my friends after school until we had to go home. And Cactus Buddy doesn't have any friends. So I want to use the McDonald Lane characters to create that friend group. Right. When you do things like that and there's an authent relationship with it and when your fans are already playing with those kind of cultural elements, then the usage of cultural icons and the usage of celebrities makes a ton of sense because it amplifies the authentic value of it. What you're talking about is the era of advertising I grew up which was celebrity as spokesperson and product shell. I think there are rare moments when you thread the needle and the joke or the humor or the usage of that celebrity just lands and it makes sense. But more often than not, right. There's a lot of familiarity. I'll use the credit card industry right now. Forget the Super Bowl. It's like, which credit card, which celebrity flogging the same sort of benefits, Right?
- [18:09]
B
Yeah, yeah. I was just thinking, I mean, probably the celebrity with the most authentic connection to the McDonald's brand is Donald J. Trump. Like, my God, that man loves McDonald's. And I think you were still there when In October of 24, he did a campaign stop serving fries at a McDonald's, which honestly, I think was actually partly brilliant for the reason you just said he was this authentic connection. I am curious what that was like behind the scenes for you. I mean, that's a very complicated situation, I assume.
- [18:40]
C
And this is the irony of all marketers today. When I was growing up, our ability to control the brand was a heck of a lot more than it is today. As a marketer, you start with the realization, almost like parenting today, you have very little control and what you can do is plan your best scenarios and then have a strategy for what you do in that particular case. When you're a brand where nearly 90% of the country walks through your doors every single year, you're going to be open to that kind of cultural engagement and you got to be prepared for it. Right. And I don't know if you recall that not only were we dealing with, you know, the current president serving fries from a drive through, that was on the heels of, during the campaign, a presidential candidate acknowledging her first job wasn't McDonald's. Right. So we were in that. And yet the critical, critical element for the brand was to not engage in politics, but to understand how to participate in culture. And then after the said drive thru event, we actually did put something out and the headline, in simple terms, so we don't belabor it, was we're not red, we're not blue, we're golden. And that was our way of taking that moment and saying to the world, these doors are open for everybody and democracy is part of this nation's history and therefore these kind of cultural things are going to happen. But no matter what, the golden arches are going to stand as they always had. And it's a fine line to walk. And I think we did a heck of a job doing that. It's not easy because in that case, like I said, you don't own your brand when those cultural moments take place. All you own is your voice and your actions and what you do around it. Because in that case, you're not only dealing with outside public, you're also dealing with your staff, you're dealing inside the company and what the expectation is to how to engage or not engage beyond.
- [20:31]
A
Staying out of the way and trying to stay out of politics. I'm sure that you had a heads up beforehand that that was happening. While what's your reaction and what do you do about, you know, various franchises that might, you know, feel different types of ways about it, various employees who might feel different types of way out of it about it? How did you manage that and what did you do once you found out that that was going to happen?
- [20:51]
C
Look, you have a history already in place and that was that the organization had a very clear understanding of what its role and culture was and the voice we would use and the voice we wouldn't use. We'd always been declarative that we were not going to engage in politics. Right. Didn't advertiser market news. And so that, that's your starting point. So the question becomes how do you respond? And that you know, that not red, not blue, but golden response played very, very well for the organization, and it didn't politicize the situation, because unless you are determined to make that part of the ethos of your brand. And by the way, when your breadth of audience is as big as ours. Right. We're democratization of experience. There aren't many brands are like that. Walmart, McDonald's. When you have that kind of percentage of the population coming through your doors and you have that kind of percentage of population working behind your counters, you've got to listen and then you've got to reflect and stay true to the brand. And I think that the team did a really good job of doing that.
- [21:46]
B
Yeah, it's interesting because you hear talk in my business, it drives us insane about brand safety and brands not wanting to advertise in news, not wanting to be politicized. And those of us who spend a lot of time writing political news stories, obviously, you know, complain about that a lot. But it's interesting to see an instance of why you don't want to, like, very, very live there.
- [22:05]
A
Yeah.
- [22:06]
C
But I will tell you, Ben, I think this is where I get to be that marketer who's not carrying a flag today. I actually don't fully align with the notion of brand staying away from news. I think in some ways it can contribute to the challenge of maintaining what the role of the news and the role of the press actually are in the marketplace. And so I struggle with it because that economic value helps maintain that quality of journalism that's, I think, really critical in the world. And at the same time, you have to recognize that does potentially open you up for more things. My point of view on that is I don't know if it opens you up any more than you're already opened up to end up in the news. And so it's an interesting thing. I get it. I totally understand it. And then I think the biggest thing is, what do you have ready? What's ready to go when certain circumstances show up, whether they're political or whether they're cultural? I mean, as marketers, we're constantly dealing with the jury of the social media and the jury of the public eye all the time?
- [23:12]
A
Well, we have a lot more that we want to get to at Tarik, but we have to take a short break. So we'll be right back after this.
- [23:25]
B
In this week's branded segment from Think with Google, I spoke to Google's VP of marketing, Josh Spanier, about whether there's space for CMOs in the boardroom. Usually when you look at a corporate board, you see a lot of former CEOs, CFOs, maybe a legal expert. But Josh, you at Google have been doing some research which suggests that there is a blind spot when it comes to the composition of corporate boards.
- [23:47]
D
I've been seeing this fascinating research looking at the number of boards which have a marketer, someone with deep marketing expertise, or a former CMO on the board. Those companies that do have a 6% higher growth rate over the study period than companies that don't. Here's the challenge, here's the opportunity for marketing. Just 16% of boards in the United States have a marketer or deep marketer on their board. 84% of companies don't. That's a real gap. That's the opportunity that marketing can help with.
- [24:19]
B
I suspect cmos will be glad to hear this data, but what specifically is it that makes them valuable?
- [24:24]
D
CMOs have always been the voice of the customer inside corporations. They are closest to the customer. They understand them to a deep level. And in this moment of unbelievable transformation in how those customers are discovering your product, how they're consuming their media, how they're changing their behavior, having a CMO who has got that insight directly at the highest level of the company is incredibly valuable. But second, marketing is sitting at the intersection of AI and nearly every department with the company. How AI is transforming your actual products, how AI is transforming your logistics, how AI is transforming media and advertising. Every part of what's going on. Having a CMO who actually understands those technologies and can speak to the whole breadth of the organization at the board level is really valuable and is changing growth trajectories.
- [25:13]
B
Is there something cmos ought to be doing to make themselves more attractive board candidates?
- [25:17]
D
They have to speak the language of finance. They have to do all the things that CMOs meant to be doing. A good place to start is over@thinkwithgoogle.com where they can get the latest insights and learnings on AI transformation and bring those insights collected across Google and across hundreds of companies inside their organizations.
- [25:34]
B
Thanks, Josh.
- [25:35]
D
Thanks, Ben.
- [25:46]
B
One of the most interesting things about your job is I think you sort of like lived through the really dramatic shift in what a CMO's job is, which is from producing this outward facing marketing. But a lot of what you did at McDonald's was this totally different kind of marketing which was driving consumers to kiosks and in particular to an app that I don't know, I guess I would not, it's not what I think of as a traditionally kind of advertising experience. And I'm curious how much of everybody's relationships with companies, with products, with media is going to be so much more personalized and so much less of what we think of as traditional advertising. I guess I just wonder if you could kind of like tell us a little about that experience.
- [26:25]
C
Yeah, look, to start with, I will tell you my draw to the role was actually the ability to create scale around that ability to use digital and data to connect more closely with our customers. When I joined the organization, we had just recently launched Loyalty, Maybe in around 20 million, somewhere around 10% digital orders. That to me was the excitement was to scale digital usage and gain data signals for customers on the scale of a business like McDonald's. Right. So when I left we were just south of 100 million users on the app of which almost 50% of them were 90 day actives. That's a customer platform that starts to get exciting.
- [27:05]
B
That's like more people than vote in most elections. That is, I mean it's kind of crazy number of people.
- [27:12]
C
And I was excited about it because. And you said the word it unlocks the way you start to engage with customers from an experience perspective. And even the way we were able to get people onto the app, you know, we weren't just doing back of the napkin cost. How much does it cost to acquire that customer and let's go spend that money. We were looking for ways that intercepted how you really leverage your brand and how you drove the performance of the business. So you'll never hear me talk about. I'm so glad because I think the industry is done with brand or performance. Like we are finally at a place where, where it's like, no, if you use your brand you should drive performance and if you drive performance, it should be done in a branded way. To your question as to how personalized and customized. I think the customization is absolutely coming. The personalization is already there in many ways. It's one of those things where it's, you know, it feels like it's just you, but it's personalized to the aggregate of many. Right. Will we ever get to the full one on one? I'll never say never. Given the role of, of large language models and AI and their ability to, to engage, I think the interesting question, the more challenging question will become will it be one to one to people or will it be one to one to me and your agent and, and how do I do that? Right. Because you're Going to deal with the Persona of the actual human and then the data behind that person, which is to me both exciting and absolutely wild.
- [28:34]
B
Selling french fries to agents.
- [28:36]
C
I mean, at the end of the day, it's about that recommendation and the way you engage. Right. It's going to. I think that's where that true personalization is going to come in. It won't be necessarily about me always having all the data, but it'll be about having enough of the data that is AI. And that agent scrapes your data, it'll appear like you're the one for them. But that's going to be an interesting story for us to get to.
- [28:59]
A
You mentioned the scale of the people who are using the McDonald's app and how much they're using it, how often they're using it. Can you explain just a little bit to our audience? Like, okay, so you've got that audience there. Part of your job was getting people onto the app. What did you do once they got there? Was it just getting them to come back more? How did you do that? Or was it getting them to order more when they were there? Like, because you were kind of inventing things on the fly, I assume. Or did you borrow things from other apps that you thought were doing a good job?
- [29:28]
C
Look, I think you're always borrowing. I would actually tell you that when I was there, we would have said we had a good app, we didn't have a great app. I think what you'll see launch in the near future will be much closer to a great app. And by that I mean you couldn't use the app anywhere in the world. It was Country Limited at the time. Right. So a great app of a great brand should be universal. It should be on a single operating system, and you should be able to do that universally. It wasn't just about usage. What we saw was we knew who those digital customers were and we knew three very important things about them. Our digital customers came more often, they spent more, and more importantly, they were completely economically positive. And so when you can see that, that encourages you to continue acquire. Unlike a lot of businesses who acquire, but acquire customers who are not necessarily profitable.
- [30:24]
A
Right.
- [30:24]
C
We knew the profitability of our customers and they were in the neighborhood of 4x the value of a traditional non digital customer. So great motivation to keep that going. But you also understand that the engagement with a customer digitally is both about enhancing their experience because you can personalize it not just on their app, but it starts to unlock the things you do on a digital menu board. So that menu board starts to know you when you come through the drive thru, those data signals start to create familiarity.
- [30:49]
B
How does it know you? Does it know your license plate or your face?
- [30:53]
C
Well, no, you start to once you register using your app, right? Once you log in and we know it's you. And then there's some, you know, obviously there's geofencing around non anonymized individuals, right? So you don't know exactly who they are, but you know who they are as a user. But the other power of digital and data is how it changes you operationally. In our situation, if we could get a customer to order for themselves and pay for themselves, that fundamentally shifts the resource allocation inside the restaurant to be able to put those resources to other uses. That had changed inside what was a traditional McDonald's. Right? When I, you know, you go back 10 years ago, you had maybe two, three channels at a drive through, you had a counter and a kiosk. When I left the business, there was upwards to 20 plus different ways to engage and transact on that brand. And so between third party delivery individuals, wait, ready on arrival, a drive through. So now even your resources inside the store can be empowered by what you get from a data signal. Like you start to understand how many people come when, what time of day for shift management. And that's where you're starting to see people talk a lot about AI, but they're not talking about the massive of technology transformation that's going on across most companies and that's moving the companies to the cloud and start to understand those. So when I can take the cloud and AI and my data and start to understand it, the implications are not just about a better customer experience, but actually a better employee experience and an overall better brand experience.
- [32:18]
A
We had on the CMO of American Eagle recently to talk about the whole Sydney Sweeney great jeans campaign dust up that got Donald Trump and J.D. vance kind of involved almost by accident. We also saw last year the cracker barrel backlash situation to their rebrand. McDonald's has kind of been able to not perfectly, but steer clear of some of those viral politicization almost on accident in both of those cases. What do you think went wrong in those cases? Why did those brands get caught up in these situations where they became politicized on accident and is there anything that they could have done differently or was this just a kind of a freak the Internet just decided and that's what happened situations?
- [33:05]
C
First of all, I think they're very different scenarios. I think the cracker barrel one is probably would have faced the same issue 15 years ago. To me, that's an example of doing. And we've all seen brands do redesigns. They clearly don't have a true sense of who your customer is, even when you're trying to expand your base. And that can go horribly wrong. I've been involved on packaging designs that have done similar things. All of us have been around just simply, you know, what felt good as a brand design just doesn't resonate with your core and your base. And I think in Cracker Barrel's case, when you're in a already in the sort of a world of let's politicize everything, it just swirled from them. But I, I think even 15 years ago they might have faced a similar issue. Just might have not gotten the same kind of news cycle that brought it up full circle to the political side of it. And as it relates to American Eagle, I think Craig's a great marketer. I think that's an example of knowing what to do when the conversations start and they start to take place and go in directions you didn't plan on. And I'm sure he talked about it when, you know, they very smartly listened measured, listened measured and followed not the noise, but as clear a signal they could get on what the reality to the situation was. Right. And I think it's one of those things that feels much worse while it's going on. Certainly when you look at the impact on their business and the results that continue for the brand, one would say it was not the most detrimental moment in time.
- [34:33]
A
Yes.
- [34:34]
C
Right.
- [34:34]
A
That's what Craig said. Absolutely.
- [34:37]
C
And I promise you that's not me, a cmo, saying it. This is me understanding what they did and frankly admired how Craig went about doing it. But I also will tell you that all of us as CMO have near miss moments a lot that you guys aren't even aware of. Right. So if you think about the summer of brand attack, you know, whether it's beers or whether it's retailers, I went through something similar where we were very close, the hordes were forming in the so at the social gate, but I had a really savvy social media team that had the right elements in place. We could see as it was starting to crowdsource and come together and we had an action plan to deal with it and no one to this day even knows it even took place. So part of it isn't just what you do and so you have to recognize the environment in which you're doing your work. Today and have the right game plans to be able to respond responsibly for the brand responsible for the business. But also when you're working like those brands are with collaborators and creators, you got to be accountable for their safety and their credibility as well. And so we had a very simple approach to things. You know, is the brand safe, is the business safe and are the individual partners working with safe? And that was how we, we governed the work that we did.
- [35:47]
B
I suppose it would spoil the whole thing if you then what if you now told us the details of that story.
- [35:53]
C
No, you wouldn't know. It was literally that summer when all the conversations were, were taking place around brands perceptions on, on gender and sexual identity. We had a moment, it wasn't even related, but the crowds decided to convert it into that conversation. Right. So you know, in those moments what you can and can't win the. It's the old if you're explaining you're already losing. But we had systems in place for starting to understand if those moments were starting to show up so that we would know what to do. And in that particular case, I don't mind telling you, Ben, in that particular case we very quickly turned off the influencers. We spoke to all of them and we spoke to one in particular and had a conversation about what the options were and we made a decision collectively on what the right thing to do was. So you know, those things, the problem is when they get out, right, and they're, and they're way down the field, there's no getting them back in the bar at that point.
- [36:46]
A
How do you do that in a way that doesn't like make the influencer kind of turn against you? Interestingly this week we actually saw in politics on a very small level this kind of thing happen. In the Texas Democratic Senate race, there was an influencer who the James Talarico campaign was trying to, to kind of get on their side. This influencer had a private meeting with him and then just created this video afterwards, basically, you know, bashing him and saying he made some kind of racially charged comments. I tweeted about this and I got sent a bunch of messages from Democratic communications folks who were very concerned about the risks of influencers kind of going rogue. Who these campaigns want to kind of like get on their side in a paid way. How do you make it so that creators that you work with don't in some ways turn against you in situation tough situations like these?
- [37:35]
C
Look, I think in our case it ended up working to our benefit. I think there was a general appreciation for the way that we actually engaged them. As early as we did that, we had them part of the decision. We didn't take an answer to them. We involved them in developing what the answer would be. You don't always get that luxury. Right. I think that's very different, though, than directly working to try and convince an influencer to take something forward on your behalf. That's always a very dicey conversation to move into, as opposed to, as goes back to, are you working with people who already have a relationship and authentic value for the brand, then you're collaborating and working together.
- [38:20]
A
Right.
- [38:20]
C
It's called collaboration. The other is actually just trying to woo an influencer to say what you want them to and that can work to your advantage. But when you open the door to do it, we did a campaign where we had three food influencers and we shot the spot, knowing full well they may taste the new dipping sauces we were doing. And we said to them, you just say what you say, but we knew that was going to be part of the risk.
- [38:45]
A
Right, yeah.
- [38:45]
C
So when you turn over the pen, you can't partially turn it over. They don't do well and their audiences see through it.
- [38:54]
B
So much of this environment that we're talking about is social media, particularly is X. I think still we're just thinking about how much it's back after this feeling that it had kind of fallen apart or was losing relevance. And I think we first or your first appearance in Semaphore, when Elon Musk was going to speak, an industry event, and you wrote an email saying you were worried that his agenda under the guise of free speech, was perpetuating racism, which, I mean, I think, like, I read a lot about Rhodesia on that website these days. Like, I think that's a quite reasonable concern, honestly. But. But I wonder how you think as a marketer about X and about Elon now. I mean, it's been quite a crazy couple of years since then.
- [39:33]
C
Yeah. I mean, look, you know, just to clarify the situation, the leaked emails were board emails in an association that was getting ready to launch an event that he was going to be at. And what the comment actually was was it was a call for the board to have had a discussion about making that decision, understanding what perceptions at the moment were about him. What weren't we accountable for, at least having that dialogue because that dialogue hadn't taken place. And then, you know, fragments of emails leak and you end up in a. In a really interesting situation. Sorry, I will tell you.
- [40:07]
A
Yeah, that's our, that's our fault on that one. Sorry about that.
- [40:10]
C
Look guys, it's not actually something that people should apologize about. It is the role of journalism. And you can't always run the full of everything. There was nothing incorrect about what was reflected. It's more a question of how those things get out in the context in which they're provided.
- [40:30]
B
Right.
- [40:31]
C
And then it's your job to have a narrative, be able to explain who you are and your position around it. Look, I've always made a separation between individuals and the businesses. If your decisions that you made about how a business function was always about the founder, you may not do a lot of things and you may do more things that brands you don't even like. Right. Because you like the founder. In my mind, you can't have a conversation about X without having a conversation about Twitter. And you can't have a conversation about like how did that marriage come about? There was decisions that got made. You can equally say, look, there were decisions to who sold and who bought and knowing what the intent was. I also give credit where credit's due there. I think it's a better platform than it was under Twitter, but I think it also did what exactly was stated was going to do, which was to be allowing certain elements to take place that would inform an audience that it has formed. Having said that at the time the brand safety issues were going on, I will tell you that there was elements of X that I thought brand safety standards were stronger there than they were on other platforms that we were on since, since, since he's taken over and then, you know, it's a power of genius of, of a lot of founders. He's verily driven a vision to what he was looking for to do. If you look at the portfolio that Linda and that organization did in terms of what that product offering now has, it is a very substantially different product in terms of what it used to be and what it, what it can do. I can tell you from my previous experiences when we shut it off, we felt it right from a. Like our social performance was one of our strongest returns. Investment in things we did and shutting it off hurt. And sometimes you have to do the right things for a business that actually hurt your business. But I, look, I, I don't, I don't tend to jump into the, the individual versus the business itself. I think it's a well run company. It had great performance qualities in terms of the things that we did that, that as often is the case. And I think there's a lot of, frankly, not just in the technology platform space. I think there's a lot of businesses where founders get out in front of things and say things. There's not necessarily full align with what I actually think about the business of itself.
- [42:44]
B
I mean, I think a lot of marketers have sort of given up on X or feel like it's just too much. And I think that the company also, I don't know if it's totally given up on advertising, but it's clearly morphing into something more like an AI business that's now going to be part of SpaceX. Like, do you think there's an, there's an advertising business there to be saved or is that kind of like, is that going away?
- [43:05]
C
You know, honestly, I haven't looked at any real recent numbers on it. I think it's a shame that when I started to see the decline that was starting to take place. But I also think it's probably a broader view of what you're starting to see in terms of where not seeing customers, I will say, or audiences are choosing to engage in how they engage. I think it also is a demonstration unfortunately of some of the broader fragmentation of people going further into their, their own communities. I won't call them echo chambers because I don't think that's what people who are in them think of them as. I think they view it as. I found my people and I found my conversation and, and that's where they're going. I think the ecosystem in general right now of advertising is going to go through a tremendous transformation under AI. The question is going to be as it was if you think back 20 years ago with the digital implications, what will the new ad model look like? Right. We're just starting to get a view from what OpenAI is that will look like for them. I don't. I think we're not even in the first inning of this one because there's no question that is both the ad game changes on the social platforms and as certainly as SEO diminishes and LLM rises, there still needs to be a way to make money and we will see those models start to show up anymore. I mean, that's the one thing I can guarantee you. You're going to see a new ad model. I don't know what it fully looks like yet.
- [44:18]
B
Do you feel like you have a sense? Give us what do you like to the degree you can see it. What do you say?
- [44:23]
C
I. I don't. I don't really feel like I have a TR I've seen like I don't think it will look the same as the SEO model. Right. Which was just the old ranking model.
- [44:33]
A
Right.
- [44:33]
C
You could pay to get your ranking sp. I don't think that's going to work. So I really don't know how you allow agents to truly use objective data scraping and develop the point of view and then overlay paid influence. I. I really don't have a clue yet what that will look like. Maybe it'll. In the crude form it'll be acknowledged that it was biased by. I don. No, I don't. I really don't. What's your guys sense? Are you seeing anything that you've caught your eye and you're nodding your head at or you think is absolutely crazy? Because it's really early days.
- [45:05]
B
Yeah. And I think what you said is true that the models are tilted toward what sort of they consider really objective sources like trade publications and actually like journalism and like, like the New York Times. Yeah, yeah, the New York Times. And there's a sort of resurgence of PR over marketing and of people of companies saying hey, we gotta get like a bunch of articles out because that's what seems to be what the models are relying on and they're IGN our paid messaging. And yet these companies are going to need revenue. I mean you just see it like they're just spending so much money.
- [45:34]
C
That's the part that's interesting. I heard my favorite quote on this one is Frank Cooper at Visa cmo. Visa said friend of the show. Well Frank, I was at an event with him and he said this is the era of the revenge of the English major and I think he's spot on. Yeah, I think, I love that quote. I think he's spot on not only in terms of the quality of the query, but what the query source will then look for in its content and how well it's written. Right. There's something incredibly ironic about meaning that your performance will actually be based on the quality of human written information over time. And yes, it can be modified. But now all of a sudden finding that voice and finding that story and the ability to convey it all of a sudden becomes really important. Which is why I think the importance of brands is actually going to find its way back. How you make money doing it. Stay tuned. I don't think it'll take that long to figure out, but I think there will be some trips and stumbles along the way.
- [46:26]
A
Well, I think a vaguely optimistic take on reading and English majors. As somebody who has an English minor is very interesting and I feel good. Yeah, yeah, exactly. It's a good place to leave it. So we really appreciate this. Tarek. This was really interesting. Thank you so much.
- [46:41]
C
That was a blast, guys. Appreciate the time.
- [46:53]
B
Everyone agrees that marketing is transforming, but there's a massive gap between agreeing on the future and actually building it. Think with Google bridges that gap. It's the resource for leaders who are done with the what and are ready for the how. Whether you're integrating AI into your workflows or rethinking measurement from the ground up, think with Google provides the insights that turn strategy into growth. So don't just talk about the AI opportunity, operationalize it. Visit thinkwithgoogle.com.
- [47:25]
A
So, Ben, as I was listening to Tarek explain the intricacies of the McDonald's app and how it's used by more people than the number of people who vote in our presidential elections, I became convinced that, you know, these super bowl ads don't really matter. And the ads that matter today are the ads that are getting you to optimize your order when you pull up to the McDonald's drive thru or when you start to get hungry on your couch and you're thinking about ordering McDonald's. Did Tarik convince you of that as well? Are super bowl ads, these $10 million ad buys, are they, are they a waste or are they worth something? What do you think?
- [48:01]
B
I mean, obviously still, you know, still a big part of marketing, still very fun and engaging for marketers and, you know, for McDonald's, they get to like tout Grimace and things like that. And I assume Grimace was also going to like make you download the app, but it just does give you a sense of these companies that have these really massive budgets devoted to marketing. When you think about what the McDonald's corporation does, not what the franchisees do, but the corporation does a lot of it is marketing spend. I mean, I think in somebody like Tarek, who's really one of the top people in that field, the job has shifted so much to how do we know you personally have all your data connect you directly to the product, however he's exactly going to do it. Have the screen when you walk into the place or drive into the place, know that you're there and offer you the, you know, tell you that it's going to fill your order in a certain way. And I mean, it is just a big change in what used to be thought of as the advertising industry toward something much, much deeper in the technology.
- [49:00]
A
Yeah, it's literally Minority Report the movie, you know, you are walking into a physical space. Yes. Except. Right. It's asking you if you want the various dipping sauces that they've tried out with their creators.
- [49:12]
B
But, like, you know, Minority Report, generally considered like a cautionary tale, I would say, but. And yet, on the other hand, dipping sauces, you know, like, less potentially menacing. I mean, does that kind of stuff freak you out or do you feel like it's basically, I mean, just as in your occasional role as like, crash test dummy, subject, consumer. Like, do you like that stuff?
- [49:35]
A
You know what I will say, I think that most of America clearly is totally fine and okay and excited about it. And. And every time I get an uber eats notification popping up on my phone around 8:30pm where I'm starting to think about whether or not I want to cook, it is sometimes useful to see. I don't mind it as much, though. I don't blame people who think that it's corroding elements of American society and life. I mean, we saw this this week with this article that was written about just how much people are spending on food delivery. And part of that is just because. Because they're so good. These companies that we were talking about on the show DoorDash, Uber Eats and whatnot, and McDonald's are just so good at figuring out when you want to eat something and what specifically you want to eat. It's quite amazing. My other question for you, Ben. I noticed that Tarek, in a lot of cases, really was thinking quite strategically about the political landscape, even though McDonald's, of course, is one of the iconic American companies and it stands for America as a whole. He wanted very, very, very much for McDonald's to steer clear of these political controversies, some of which befell other brands. Were you surprised by how much he was thinking about politics and news and current events? Even though McDonald's, of course, is a brand that, as he mentioned, does not advertise anywhere near news.
- [50:58]
B
Yeah, I mean, I think when you talk off the record to marketers, they're all obsessed with politics. They're all news junkies. They're interested in the political climate and in a way are taking that expertise and using it to, like, try to steer their companies between the raindrops. I mean, the notion that Donald Trump walks into your shop and starts handing out your product and you've got to find a way to not alienate the 47% of Americans who loathe him, I mean, that strikes. I would not know how to do that. That seems like a very complicated Challenge.
- [51:32]
A
Right. Not to mention all the employees within your company who might not be so pleased with that association either or might be thrilled by. Was very interesting to, to think about that element. Ben, do you go to McDonald's? What's and if so, what are you, what are you having when you go there?
- [51:47]
B
Oh yeah, it's my like when I'm at Union Station and I've like missed the train that I wanted to make and it's, I don't know, I'm like stuck with like the 10pm out of Union Station back to New York. I'll. It's like two, two cheeseburgers, Diet Coke, fries, amazing. People who sit next to me on the plat train are always, are always, are always pleased to hear that. Well, I, you know, we don't, I don't wonder if podcast partners are supposed to know each other's orders. I don't know yours. Max, what about you? Are you above this stuff?
- [52:12]
A
I love. No, I, I'm a, I'm a big fan of, of McDonald's. I. It's mostly like a guilty pleasure road trip type of thing. You know, I'm not eating it on a necessarily a daily basis, but when I'm there I'm getting some French fries definitely. Ideally maybe to share and a shake maybe to share as well. Also maybe some nuggets to share and a burger for myself. It's a lot of food, but I like to share. But really the key of course is to go for breakfast. The coffee is the best thing that you can get there.
- [52:40]
B
Have we somehow psyched ourselves into doing unpaid marketing for McDonald's here?
- [52:43]
A
We literally have.
- [52:44]
B
Maybe we should cut it to marketers about marketing. I blame Tarek. I don't know what happened there.
- [52:48]
A
That's true. We didn't do it for Visa when they were on the show or for American Eagle. I'm not, haven't. Wasn't so interested that. But McDonald's is great.
- [52:57]
B
This is some kind of mind trick Tarek did on us.
- [52:59]
A
Yes, download the app and optimize your. Optimize your order. Well, that is it for us this week. Thank you so much for listening to another episode of Mixed Signals from us here at Semaphore. Our show is Produced by Chris McLeod of Blue Elevator Productions and Josh Billenson, our excellent producer here at Semaphore. With special thanks to Anna Pizzino, Jules Zern, Chad Lewis, Rachel Oppenheim, Tori, Colonel Core, Garrett Wylie and Daniel Haft. Our engineer is Rick Kwan and our theme music is by Steve Bone. Our public editor is Grimace. I don't know who. Who else? The Hambur burglar? Who the hell knows?
- [53:43]
B
If you're still here, please follow us wherever you get your podcasts and subscribe on YouTube.
- [53:48]
A
And if you still want more, you can always subscribe to Semaphore's media newsletter out every Sunday night. Sam.