While the value of chief marketing officers is being questioned at many Fortune 500 companies, and as CMOs’ waning influence could pose a setback for female executives, the CFO and CMO at one of the world’s most recognized brands are working together toward common goals.
McDonald’s Ian Borden, EVP and global CFO, and Morgan Flatley, EVP, global CMO and new business ventures, chatted about a variety of topics with Fortune following their panel session at the Cannes Lions Festival of Creativity on Monday morning. And one of those topics happened to be their partnership at the company that ranks no. 162 on the Fortune 500, generating total revenue last year of $25.49 billion.
“We spend a lot of money on marketing,” Borden said. “It’s, frankly, one of the most important growth investments we make.” It’s key to driving strong top-line growth, he said. Years ago, “we used to think of marketing as a bit of a black box, or nebulous part of our business where it didn’t really have good visibility, and didn’t have good transparency.” In 2019, McDonald’s eliminated its global CMO role but reinstated it less than a year later, Fortune previously reported.
Flatley joined McDonald’s in 2017 as U.S. chief marketing and digital customer experience officer. In 2021, she was promoted to global chief marketing officer, and also became head of new business ventures in 2023.
It’s under Flatley’s leadership that McDonald’s marketing team and agency partners created a companywide concept called “fan truths,” a universal language about the moments, memories, rituals, and behaviors of McDonald’s consumers based on data. The transparency has build trust in marketing among McDonald’s business leaders, Borden said.
A key metric
Besides creativity, another accelerant for business is what the company calls its “known customer base”—digitally learning more about patrons and their preferences. McDonald’s connects with its customers is through personalized and digital offers, like those available on the mobile app.
Marketing and finance share the customer lifetime value metric to gauge growth with customers, Flatley said. “It is a really important metric for us today, and over the next few years,” she added. McDonald’s has a goal to grow its loyalty programs from 150 million active users to 250 million by 2027, and increase sales attributable to these users to $45 billion.
And that growth has been aided by savvy marketing. Borden pointed to a September 2020 promotion that offered the Travis Scott limited-time meal, based on the musician’s favorite childhood order. In its earnings report released Oct. 8 of that year, comparable sales at U.S. restaurants rose by 4.6% compared with the same three-month period a year earlier.
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And in June 2023, the company launched a Grimace Birthday Meal featuring a limited-edition purple shake, Borden said. Comparable quarterly sales at U.S. McDonald’s locations increased 10.3%.
“I think you could clearly link those great creative ideas to factual fan truths,” Borden said, “and clearly link those ideas to incredibly strong business results.”
Taking risks
Borden, global CFO since 2022, has spent more than 25 years at McDonald’s, leading markets and functions globally, and it’s been a combination of these experiences that led him to view marketing as more than just a cost center. Nonetheless, finance chiefs do tend to be risk averse.
“Of course, when I hear the word ‘risk,’ my hand always shakes a little bit,” he quipped. Regarding marketing, “we take risks on the execution,” he said. “You don’t want to take risks on the strategy, or on the consumer insight, or the fan truth,” he added.
It’s in the creative execution of promotions where you want to challenge your team and agencies. Being a bit uncomfortable “unlocks the best creative output,” Borden said, adding that instead of asking yourself “Will it work?” you instead should consider “Is it true?” “And if it’s not true, then we’re going to go back and make sure we’ve got the right fan truth.”
This story was originally featured on Fortune.com
