Marketing pro Tariq Hassan on how McDonald’s embraced its Donald Trump drive-thru moment

25:41We 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 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?

26:16Will we ever get to the full one-on-one? I'll never say never, given the role of large language models and AI and their ability to engage. I think the interesting question, and 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 how do I do that, right? Because you're going to deal with the persona, the actual human, and then the data behind that person, which is, to me, both exciting and absolutely wild. Selling French fries to agents. I mean, at the end of the day, it's about that recommendation and the way you engage, right?

26:49It'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. 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.

27:22What 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? 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? 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.

27:53It 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 to acquire, unlike a lot of businesses who acquire, but acquire customers who are not necessarily profitable, right?

28:33We 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-through. Those data signals start to create familiarity. Wait, how does it know you? Does it know your license plate or your face?

29:01Well, no. Oh, 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?

29:34When I, you know, you go back 10 years ago, you had maybe two, three channels in a drive-thru, 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, you know, wait right in arrival, a drive-thru, like, so now you're, even your resources inside the store can be empowered by what you get from a data signal. Like you can start to understand how many people, you know, 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 technology transformation that's going on across most companies.

30:12And 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. We had on the CMO of American Eagle recently to talk about the whole Sidney 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.

30:56What 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? First of all, I think they're very different scenarios. I think the Cracker Barrel one 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, that clearly don't have a true sense of who your customer is, even when you're trying to expand your base.

31:31And 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 already in this sort of a world of let's politicize everything, it just swirled from them. But I think even 15 years ago, they might've faced a similar issue, just might've not gotten the same kind of news cycle that brought it full circle to the political side of it. And as it relates to American Eagle, look, I think Craig's a great marketer.

32:05I 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 continued for the brand, one would say it was not the most detrimental moment in time.

32:42Yes, that's what Craig said. Absolutely. And I promise you, that's not me as CMO saying it. This is me understanding what they did. And frankly, I 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 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.

33:21And 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've got to be accountable for their safety and their credibility as well. And so we had a very simple approach to things. Is the brand safe? Is the business safe? And are the individual partners working safe?

33:53And that was how we governed the work that we did. I suppose it would spoil the whole thing if you now told us the details of that story? No, you wouldn't know. It was literally that summer when all the conversations were taking place around brands' perceptions 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. 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.

34:31And 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 way down the field, there's no getting them back in the barn at that point. 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 happened in the Texas Democratic Senate race.

35:07There was an influencer who the James Tallarico campaign was trying 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 tough situations like these?

35:43Look, I think in our case, it ended up working to our benefit. And 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 opposed back to, are you working with people who already have a relationship and authentic value for the brand?

36:26Then you're collaborating and working together, right? 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, right? Yeah. 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.

37:02So 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 in 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, you know, I read a lot about Rhodesia on that website these days. I think that's a quite reasonable concern, honestly.

37:33But 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. Yeah, I mean, look, 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. 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 really interesting situation.

38:14Sorry. I will tell you. Yeah, that's our fault on that one. Sorry about that. No, 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 and the context in which they're provided, right? And then it's your job to have a narrative to 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 business function was always about the founder, you may not do a lot of things and you may do more things with brands you don't even like, right?

38:59Because 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 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 what stated was going to do which was to be allowing certain elements to take place it would form 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 he's taken over.

39:50And then, you know, it's a power of genius of a lot of founders. He's barely driven a vision to what he was looking forward 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 can do. I can tell you from my previous experiences, when we shut it off, we felt it. Right? From like our social performance, it 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.

40:27But look, I don't tend to jump into 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 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 of line with what I actually think about the business of itself. 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.

41:07Like, do you think there's an advertising business there to be saved or is that kind of like, is that going away? 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 only customers I will say or audiences are choosing to engage and 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.

41:54The 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 suggesting that will look like for them. I think we're not even in the first inning of this one because there's no question that as both the ad game changes on the social platforms and And 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 more. I mean, that's the one thing I can guarantee you. You're going to see a new ad model.

42:26I don't know what it fully looks like yet. Do you feel like you have a sense? Give us what do you like, to the degree you can see it, what do you see? I don't really feel like I have a true, 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, right? you could pay to get your ranking space. 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 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't know.

43:04I don't, I really don't. What's your guy's sense? Are you seeing anything that has caught your eye and you're nodding your head at or you think is absolutely crazy because it's really early days. Yeah, 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. Like the New York Times, yeah. Yeah, the New York Times. And there's a sort of resurgence of PR over marketing. And if people, if companies say, hey, we got to get like a bunch of articles out because that's what seems to be what the models are relying on and they're ignoring our paid messaging.

43:37And yet, these companies are going to need revenue. I mean, you just see it. Like, they're just spending so much money. 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. I mean, 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? And there's something incredibly ironic about meaning that your performance will actually be based on the quality of human written information over time.

44:15And 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 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. Well, I think a vaguely optimistic take on reading and English majors as somebody who has an English minor is very uplifting and a feel good. Yeah, yeah, exactly. It's a good place to leave it. So we really appreciate this, Tarek.

44:48This was really interesting. Thank you so much. That was a blast, guys. Appreciate the time.

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45:58your 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 Tarek convince you of that as well? Are Super Bowl ads, these$10 million ad buys, are they a waste or are they worth something? What do you think? 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.

46:32When you think about like what the McDonald's corporation does, you know, not what the franchisees do, but what the corporation does, like a lot of what is about, you know, is marketing spend. I mean, I think in somebody like Tarek, who's like really one of the top people in that field, the job has shifted so much to how do we like 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.

47:05And 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. 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. But like, you know, Minority Report generally considered like a cautionary tale, I would say. And yet, on the other hand, dipping sauces were 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 crash test dummy, subject, consumer, do you like that stuff?

47:48You know what? I will say I think that most of America clearly is totally fine and OK and excited about it. And every time I get an Uber Eats notification popping up on my phone around 8.30 p.m. 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 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.

48:34It'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, you know, 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?

49:12Yeah, 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 all of 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, you know, the 47 % of Americans who loathe him. I mean, that's a, that strikes, I would not know how to do that. That seems like a very complicated challenge. 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 it.

49:53It was very interesting to think about that element. Ben, do you go to McDonald's? And if so, what are you having when you go there? Oh, yeah. It's my like when I'm at Union Station, and I've missed the train that I wanted to make. And it's, I don't know, I'm stuck with the 10 PM at a Union Station back to New York. It's like two cheeseburgers, Diet Coke, fries. Amazing. People who sit next to me on the play train are always pleased to hear that. Well, 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?

50:25I love – no, I'm a big fan of McDonald's. It's mostly like a guilty pleasure road trip type of thing. I'm not eating it on 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. Have we somehow psyched ourselves into doing unpaid marketing for McDonald's here? We literally have. Maybe we should cut it.

50:58Talking to marketers about marketing. I blame Tarek. I don't know what happened there. That's true. We didn't do it for Visa when they were on the show or for American Eagle. I'm not, uh, haven't, uh, wasn't so interested in that. But McDonald's is great. This is some kind of mind trick Tarek did on us. Yes, download the app and optimize your order.

51:20Well, 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 Billinson, our excellent producer here at Semaphore. with special thanks to Anna Pizzino, Jules Zern, Chad Lewis, Rachel Oppenheim, Tori Kaur, Garrett Wiley, and Daniel Haift. Our engineer is Rick Kwan and our theme music is by Steve Bone. Our public editor is Grimace? I don't know. Who else? The Hamburglar? Who the hell knows? If you're still here, please follow us wherever you get your podcasts and subscribe on YouTube.

52:01And if you still want more, you can always subscribe to Semaphore's media newsletter out every Sunday night. Thank you.