Day 043 - 01 Nov 94 - Page 13

     
     1        A.  We do not spend any media dollars, but we do spend
     2        dollars against the production of the creative materials.
     3
     4   Q.   What does the money from the restaurants provide for?  What
     5        does it supply?
     6        A.  In the main, it provides for buying the media in which
     7        the advertising is placed.  It may also buy some point of
     8        purchase or premiums or promotion activity.
     9
    10   Q.   When you say "buy the media", you do not mean you purchase
    11        the Columbia Broadcasting System?
    12        A.  No.  Media is placed on the networks, and that is the
    13        media they buy.  That is the expression we use in the
    14        United States.
    15
    16   Q.   They buy the advertising space?
    17        A.  That is correct.
    18
    19   Q.   Whether it is in a newspaper or on television, or whatever?
    20        A.  That is correct.
    21
    22   Q.   The air time?
    23        A.  That is correct.
    24
    25   Q.   But the Corporation pays the agency to make the
    26        advertisements?
    27        A.  Well, the agency is compensated both by the placement
    28        of the media, so they get some compensation from that.
    29        They also get some compensation in the production of the
    30        creative materials.  So the majority of the compensation is
    31        done by the placement of the media.
    32
    33   Q.   In the statement which you wrote for us and signed back in
    34        June last year, you told us that the expenditure of
    35        advertising money in McDonald's in the United States was
    36        split as between national and local sources.  Do you
    37        remember?
    38        A.  That is correct.
    39
    40   Q.   Is that the same today, or has that changed?
         A.  No.  It is fairly the same.  There may be a few changes
    42        where national will decide to, because it is more
    43        efficient, pick up different portions or different kinds of
    44        media, but media is spent both on a local and on a national
    45        basis.
    46
    47   Q.   What about advertising on national television networks; who
    48        deals with that?
    49        A.  That is a national co-operative that the restaurants
    50        participate in. 
    51 
    52   Q.   Is that nation co-operative called OPNAD? 
    53        A.  That is correct.
    54
    55   Q.   I ask you to get the out the fatter of the two bundles.
    56        You can put number 3 away for the moment.
    57        A.  Okay.
    58
    59   Q.   Turn to tab 20?
    60        A.  I have it.