The alliances grow

Promotional partnerships have become de rigeur in family marketing, but the stakes have skyrocketed in recent months. Values are measured in the billions in the grand alliances struck between McDonald's Restaurants and Walt Disney, and between PepsiCo and Lucasfilm....
July 1, 1996

Promotional partnerships have become de rigeur in family marketing, but the stakes have skyrocketed in recent months. Values are measured in the billions in the grand alliances struck between McDonald’s Restaurants and Walt Disney, and between PepsiCo and Lucasfilm.

With recent talks between Burger King and DreamWorks SKG, it’s natural to wonder whether more of these exclusive mega-marriages between entertainment and fast-food or beverage companies are in the works.

Marketing experts say the use of entertainment properties by mass-marketers will continue to rise, but that the big deals announced so far are very special cases.

‘We’ll only see a handful of these types of alliances,’ predicts Howard Roffman, vice president of licensing for Lucasfilm, who helped forge the PepsiCo deal.

‘It’s a very limited trend, because there are only so many market leaders in those fields and so many global franchises that can support them.’

The two completed deals are unique. Disney and McDonald’s have committed to a 10-year, $1-billion alliance, beginning in 1997, to include kids meal promotions as well as the fast-food chain becoming the presenting sponsor of the Dinoland exhibit at Disney’s new Animal Kingdom theme park, opening in 1998.

The deal is exclusive, with a limited number of exceptions. McDonald’s may occasionally pass on a Disney property, and the studio can then shop it to other fast-food chains outside the hamburger category. McDonald’s apparently has a certain number of ‘outs” the chain will not divulge these details to promote non-Disney properties. In November, before the Disney deal kicks in, the chain will promote Space Jam, a Warner Bros. film starring McDonald’s endorser Michael Jordan.

Driving the deal was McDonald’s lust to grab the mega-promotions for animated blockbusters such as 1997′s Hercules. Not only did McDonald’s land that big prize for its franchisees, but it also snatched it away from archrival Burger King.

With its lucrative Disney tie sundered, Burger King becomes the automatic first choice for any kids entertainment marketer. It is now in discussions with a range of studios, including the fledgling DreamWorks, but these talks are unlikely to result in a long-term, exclusive alliance. ‘Burger King gets to sit back and pick and choose any property it wants,’ says Bert Gould, executive vice president of marketing at Marvel Comics, who recently left a similar post at Fox Kids Network. ‘And the deals they can make are great they don’t have to pay as much.’

BK is keenly interested in signing a deal for next summer’s The Lost World, Steven Spielberg’s sequel to a little film called Jurassic Park. This is not a DreamWorks property. It belongs to MCA/Universal and Spielberg’s Amblin Entertainment.

However, the lines are a little blurred, since many Amblin execs are now at DreamWorks and work on projects at both companies. One possibility for BK is a double dino deal for The Lost World and the direct-to-video Land Before Time IV, since the Jurassic sequel may well be a PG-13 film and thus too scary for a kids meal promotion.

Talks for upcoming DreamWorks animated features such as Prince of Egypt, for Christmas ’98, or the following year’s El Dorado would come later.

Pepsi’s alliance with Lucasfilm for Star Wars marks Pepsi’s first company-wide marketing initiative. Its fast-food chains (KFC, Pizza Hut, Taco Bell), snacks (Frito-Lay) and beverage divisions will participate worldwide in the theatrical launch next February of the Stars Wars Trilogy Special Edition, which includes new footage and effects. Pepsi also won the rights to the first in a series of three new Star Wars films, scheduled for 1999. With worldwide advertising, point-of-sale, in- and on-package promotions and premiums, the Star Wars deal is valued at $2 billion.

‘The three most significant categories for an entertainment tie-in are restaurants, snacks and beverages,’ says Lucasfilm’s Roffman. ‘Only one company embraces all three on a global basis.’

But the additional promo weight was only part of the consideration. ‘That’s a given,’ says Roffman. ‘We wanted to know who could provide the right image for Star Wars. Who is the best at imaging and positioning? Who has the best advertising and creativity? We want to do things that are big and impactful.’

Star Wars was a great fit for Pepsi, says Barbara Watts, a former studio marketing executive and now an independent in Van Nuys, California.

‘McDonald’s and Burger King could get properties that a Taco Bell could not,’ she says.

‘Pepsi had been talking about a company-wide effort for years and years. All of its restaurants and divisions have different consumers, focuses and images, so it’s very difficult to do a system-wide campaign. Star Wars is unique. It’s got a global presence, a nostalgia factor for boomers, collectibles and it’s an all-family property.’

Watts predicts more alliances, but believes the trend will ebb and flow.

‘There are pluses and minuses to it,’ she says. ‘You can become more familiar with your partner in how best to build joint campaigns and you can do it further out. There’s a joint agenda implied there. But sometimes there’s a sense that we’ve got them already, so why do we have to push?

‘The studios are looking for long-term relationships, so they don’t have to sell every time. But corporate America is keeping its options open if they lock down, they have to take some weaker properties with the stronger ones.’

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