Beanie Madness
I was on my way to London at the Cincinnati Airport on April 16, 1997, when I first witnessed Beanie Madness. With a long flight ahead, I’d decided to stop for a bite to eat before boarding. Heading to a near-vacant Taco Bell, I remembered that my two daughters were collecting the Teenie Beanie Babies being offered with McDonald’s Happy Meals. Changing course to the burger chain, I was surprised by a huge line. I wanted to score an early trip present for at least one daughter, however, so I joined the crowd. After ten minutes of shuffling in the line, it was my turn. “I’ll have a cheeseburger Happy Meal and a small Diet Coke,” I murmured with embarrassment to the clerk. (I had never before ordered a Happy Meal without daughters Katie and Sallie gripped firmly in hand.) Upon receiving my order, I retreated to the fringes of the food court to surreptitiously eat my meal. Casing the dining area to ensure that no one I knew could see me eating kiddie food, it suddenly hit me…there were scores of other very self-conscious adults doing the same thing. In fact, every single adult there was eating from a tiny bag of fries while sipping from an incredibly small Coke. “Good Lord,” I remember thinking, “McDonald’s is taking over America with a kids’ promotion!”
Happy Meals were created in 1979 as a means of generating continuity with young children. The idea of giving kids a prize with purchase can be traced back to Cracker Jack and Buster Brown shoes, both of which did a phenomenal amount of business with young children. The genius of the McDonald’s concept, however, was in the bundling of the meal (sandwich, fries and drink) with the toy.
Despite scaled-down portions, half of McDonald’s three-to-nine year-old target audience for Happy Meals can’t finish the food — so why on earth would a parent buy each kid their own meal? For the toy, of course.
McDonald’s has successfully sold billions of Happy Meals on the strength of “free” toys with each purchase, toys that are, by and large, terrific. It averages 40 million premiums during a typical four-week Happy Meal promotion in the U.S. Since this number is usually broken into as many as eight different toys within each theme, the amount of sales is staggering. And despite incredible economies of scale, McDonald’s still spends upwards of 40 cents per toy to ensure that it gets premium premiums. It’s not unusual to get a “free” toy at McDonald’s with a perceived retail value of around two dollars.
Prior to April 1997, the all-time record for a Happy Meal program was 86 million sold via a 101 Dalmatians film tie-in. How much further can you go? Well, the folks at McDonald’s aren’t afraid of putting the “mass” in mass marketing: In 1996, they ordered 100 million toys from a company called Ty, Inc.
Ty, Inc. was founded in 1993 by a young entrepreneur named Ty Warner. He made his fortune (estimated at $1 billion-plus) by creating the Beanie Baby line of collectible plush toys. Early on, Warner eschewed selling his line to major retail chains, opting instead for small gift and card shops, the “mom & pops” of retailing. This tactic, a virtual guarantee of failure in any other industry, made Ty. Fanatical collectors staked out parking lots waiting for the UPS truck to show up with a new shipment of Beanies — and this began to be considered normal behavior.
In keeping with this exclusive approach, the company had vigorously rejected promotional deals. In 1996, however, McDonald’s persuaded Warner to play. It launched the first “Teenie Beanie Baby” Happy Meal promotion on April 11, 1997. Until then, a Happy Meal promotion cycle consisted of four weeks, but due to the volume of premiums purchased, McD’s elected to stretch the Beanie event until May 15, or five weeks. It needn’t have bothered: As soon as the promotion hit the restaurants, mass hysteria ensued. Marie Dyson, a Beanie collector with 700 “babies” who also runs the popular “About Beanies” Web site, recalls “It was really crazy. You couldn’t get into McDonald’s, they were so crowded. People were getting pretty mean about it.”
What was different from other Happy Meal toys? “It wasn’t just kids clamoring to participate, it was all ages,” remarked McDonald’s spokesperson Lisa Howard at the time. “We caught it at the right time, as it hit a crest; and it continues to crest.”
The promotion sold out of 100 million Teenie Beanie Baby Happy Meals in just 10 days (a mere 25 days ahead of schedule). Priced from $1.99 to $3.25, it’s likely that the chain reached $250 million in Happy Meal sales on this promotion. To keep this in proportion, consider that in 1996 McDonald’s boasted that it drew 87% of all children aged three-to-nine through its doors every four weeks. This claim seems so huge as to appear preposterous, but for the 10 days of “Beanie Madness” it was too low! According to the U.S. Census’ Statistical Abstract for 1995, there were approximately 27 million children in the Happy Meal target audience. Divide the target population into the 100 million meals sold and the result is that, on average, 100% of McDonald’s target audience purchased a Happy Meal four times in 10 days.
Today, most CPG companies run 50 million circulation FSIs and get redemption rates of less than 1%, or about 500,000 redemptions. Beanie Madness generated 200 times the results of a typical FSI — in a week and a half. The promotion is even more astounding when you realize that Beanie Madness was narrowly targeted and FSIs are random.
McDonalds’ marketers, being smart folks, figured that since the idea worked so well the first time they ought to run it again. The second Teenie Beanie Babies Happy Meal promotion broke on May 22, 1998. Although it was just a four-week event this time, the promotion was rumored to have had over 120 million premiums, 10 million each of 12 different characters. Beanie II was succeeded by Beanie III (May 21-June 3, 1999), which begat Beanie IV (June 13-July 13, 2000), after which the promotion was retired.
Factoring in the international promotions that McDonald’s ran on this theme, it’s entirely probable that the company moved more than half a billion Teenie Beanie Babies over the run of this concept.
To the consumer, each new generation of the promotion must have looked pretty much like the first, except for the fact that the Teenie Beanie Baby character dolls changed from event to event. But the campaign still resonates. Be grateful that McDonald’s only uses its power over consumers for good, because there’s never been any marketing event before Beanie Madness that averaged more participants than there were U.S. households.
Rod Taylor is senior VP of promotions for Coactive Marketing. Send your feedback to: [email protected].
Happy Signs of the Times
Centuries from now archaeologists will determine what kind of society we were simply by viewing old Happy Meal premiums. Given the great variety, it’s tough to pick the best from a genre celebrating its 25th anniversary.
1991 McDino Changeables — These toys looked like food products (burgers, shakes and fries), but broke down into completely different shapes in a three-dimensional puzzle. When you broke them down in a different way, they looked like comical dinosaurs and had names like “Fry-Ceratops” and “Shake-Atop.” You’re probably thinking “they can’t do that.” Trust me, they can and did. 1995 Toy Story — This promotion leveraged Disney’s (then) relationship with Pixar, using characters of toys come to life. Pixar sold vast amounts of licensed merchandise over the run of this film and its successor, Toy Story II, so getting something this well-made with a kid’s meal was pretty amazing.
1999 Inspector Gadget — This film never got the notoriety most of Happy Meals tie-ins enjoy, but the toy ranks as my all-time favorite. “Gadget” used his special tools to fight crime. McD’s created an eight-piece, plastic breakdown version of the Inspector. When you collected all eight, they formed Inspector G himself. The attention to detail in this series is incredible.
2003 Finding Nemo — This Academy Award-winning Pixar film was the hit of Summer 2003. The story of a clownfish father searching the ocean for his lost son resonated with young and old. The Happy Meal premiums were plastic versions of the fishy stars that worked as mini water pistols (you pressed on the character’s fin to squirt the water). The good ones almost write themselves!
