Media Coverage

July 28th, 2014

How Taco Bell Succeeded By Ignoring A Marketing Taboo

How Taco Bell Succeeded By Ignoring A Marketing Taboo

Author

Suzanne Vranica

Wall Street Journal

Taking direct aim at a competitor in advertising is usually a no-no in marketing but for Taco Bell in its breakfast war with McDonald’s, it so far appears to have been the right approach.

With nearly a dozen aggressive TV ads airing since March, including a spot featuring real-life men named Ronald McDonald professing their love for Taco Bell, Taco Bell is generating plenty of online buzz and prompting McDonald’s to respond online.

So far the Taco Bell breakfast ads are scoring slightly higher, in terms of likeability, than McDonald’s breakfast pitches, according to Ace Metrix, a research firm that measures ad performance in the U.S.

Moreover, Taco Bell’s parent company Yum! Brands claims success with its breakfast push, telling analysts earlier this month it was seeing a “dramatic difference” in same-store sales growth between restaurants offering breakfast and those that don’t. Its breakfast push is already profitable, it said.

Last week Taco Bell embarked on the latest round in the marketing war, releasing its latest set of breakfast ads including another spot featuring people called Ronald McDonald talking up Taco Bell’s new breakfast offerings while taking jabs at the Burger Baron.

Going after McDonald’s so directly caused some angst inside Taco Bell, conscious that taking aim at a competitor is risky. Indeed, there is some “negative sentiment” surrounding Taco Bell’s Ronald ads, said Peter Daboll, chief executive officer at Ace Metrix. Some consumers view those ads as “attack ads,” he added.

Moreover, the Taco Bell breakfast ads scoring the highest among consumers are not those featuring the Ronald character, Ace Metrix says, but rather ads that feature two old men watching young people get their breakfasts at Taco Bell and wondering why it’s good to eat breakfast with one hand.

Still, Taco Bell has little choice if it is to succeed in establishing itself as a breakfast destination alongside McDonald’s, which has more than 19% of the fast-food breakfast market, according to Sanford C. Bernstein & Co.

So far McDonald’s doesn’t seem to be worried. “Customers choose McDonald’s breakfast because of our great, freshly prepared products; every morning we crack fresh eggs, grill sausage and bacon, bake biscuits, toast muffins and brew our outstanding McCafe coffee.  Year-to-date breakfast sales are up for the U.S. business. We remain focused on our customers.”

Changing breakfast behavior is one of the most vexing marketing challenges in the business. “Breakfast is the hardest day part to crack,” said Tony Pace chief marketing officer of Subway. “In this crazy, anything can happen world, the morning routine is usually the only thing most people can count on,” he added.

Pete Favat, chief creative officer at Taco Bell’s ad firm Deustch LA, says people “don’t want to think about breakfast because they are still a zombie in the morning.”

To help wake them up, Taco Bell needs to be provocative. “Without tension no one pays attention,” says Mr. Fava. “It would be like the Movie Jaws without the shark.”

Moreover, Taco Bell faces a big-spending rival which has been in the business for decades. Compared with Taco Bell’s $12 million, McDonald’s spent $47 million in the first quarter, Kantar Media data shows.

Last year, McDonald’s shelled out a total of $136.1 million on breakfast themed ads in the U.S., Kantar estimates. And that figure doesn’t include the heavy amount of dollars it pours into social media, and other forms of marketing such events, contents, online video ads and social media. Consumers routinely are bombarded with image of Egg McMuffin on Twitter nowadays.

A person familiar with Taco Bell said the company is planning to spent between $40 million and $50 million on ads for its breakfast launch. A spokesman for Taco Bell declined to give out specific spending figures but did say this will be the company’s biggest marketing push in its history.

To read the original article, visit the Wall Street Journal.

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