DDB bites a chunk of McDonald's business

MANILA: Fast food chains are stepping up marketing activities in the Philippines, where a fragile economy has created growth opportunities for this segment of the food and beverage business. McDonald's has appointed DDB to handle its 20th anniversary campaign, while the third-ranked Burger King has awarded its advertising contract to Campaigns & Grey. The fast food market is dominated by local player Jollibee Foods, which is estimated to control 46 per cent of the 60 billion peso (USdollars 1.3 billion) business with its Jollibee and Chowking brands. McDonald's is said to have 29 per cent of the market and Burger King at just three per cent. McDonald's decision has come as a surprise since its agency of record Leo Burnett, the other agency in the pitch, was expected to win on the back of a strong track record for the hamburger giant. The two agencies have been battling around the globe to expand their share of the McDonald's business. A DDB source close to the pitch said its recent win has dealt a blow to Burnett because the project is earmarked as one of McDonald's high profile promotions in the country this year. Despite the appointment, Burnett remains the brand steward. A source from the agency shrugged off speculation that DDB was winning the upper hand in the Philippine arena in the long-running DDB-Burnett battle for the McDonald's account globally. "Shifts will occur. It's normally a question of when, but it ain't happening now," the source said. Meanwhile, Campaigns outgunned Publicis AMA, Santiago & Puno Advertising and incumbent Lowe-Lintas for the Burger King brief. Campaigns had been doing promotional work for Burger King since December last year, but had to wait until this year for head office approval to handle local advertising, said the agency's account manager Jev Ramos. Both appointments were sealed amid intensifying competition in the fast food market: McDonald's is said to be investing USdollars 50 million to expand its presence, while Burger King's agency switch is in line with the more aggressive advertising stance it has taken since mid-2000. Burger King is looking to Campaigns to help it improve itslow market share. It plans to focus on its value meals as well as expand marketing efforts to provincial cities. Campaigns' general manager and chief operating officer Angelito Pangilinan said services will include advertising as well as PR to introduce Burger King in the market, especially in the kids segment, and expand its appeal to the mass consumer market. Burger King is operated through a franchise held by Ayala Corporation's Pure Foods Unit. It is understood that Ayala intends to keep the franchise even after it sells off Pure Foods. Since making its menu more affordable, Burger King has succeeded in pinching market share from Jollibee, according to market observers. Along with stepping up its marketing, the chain plans to increase the number of outlets from 24 to 36 in the next three years. - Additional reporting by Lee Chipongian.

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