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Investment Analysts Say Many People Don’t Care Where Herb Is

January 21, 1986

NEW YORK (AP) _ Herb, the missing character on which Burger King has based a $40 million advertising campaign, is about to come in from the cold.

But some investment analysts who follow the fast-food business say they wonder if the public will notice.

The nation’s second-biggest hamburger chain has been looking for Herb, described as someone who had never tasted a Burger King hamburger, in an advertising campaign over the last two months.

Herb will be introduced formally in two 30-second commercials that the Miami-based company has purchased during the Super Bowl football game Sunday.

In advance of those commercials, Burger King had Herb make an appearance Tuesday on NBC’s ″Today″ show and planned to answer questions from reporters Wednesday at a Burger King restaurant here.

″It will be important for the rest of the campaign that people know what he looks like,″ said Joyce Meyers, a company spokeswoman.

She declined to offer more details, however.

Advertising Age, a trade journal, reported Monday that for the next stage of the ad campaign, Herb will be sent on a cross-country tour of Burger King restaurants, offering the person who spots him first in each of the eateries a cash prize of $5,000, free lunches for everyone else and a chance to enter a $1 million sweepstakes.

But some analysts questioned whether many consumers were interested.

″The campaign has been a flop, and the licensees have been unhappy with it,″ said Edward Tavlin, restaurant industry analyst in the Miami office of the investment firm Prescott, Ball & Turben.

He said it is unclear whether the fault was the concept or because it coincided with an advertising blitz by its bigger rival, McDonald’s Corp., for what its newest hamburger - the McDLT.

McDonald’s, based in Oak Brook, Ill., sells the new sandwich in a special package that permits it to keep the hot hamburger patty separate from the cool lettuce and tomato until the customer puts them together. It became available nationwide Nov. 4, shortly before the Herb campaign was launched.

″The McDonald’s McDLT campaign certainly stole some of Burger King’s thunder,″ said Donald Lupa, the restaurant industry analyst for the investment firm Duff & Phelps in Chicago.

Lupa said the Herb campaign ″is obviously floundering″ because it has not improved sales per store.

But Burger King said it is satisfied with the campaign because it has increased awareness of Burger King among customers who will now be more likely to think of it when deciding where to get a hamburger.

Harold Friedman, a senior vice president at the advertising agency J. Walter Thompson USA in New York, which created the Herb campaign, acknowledged last week that the campaign was slow to catch on because of unexpectly heavy competition from the new McDonald’s ads. But he said January sales had perked up.

The Herb campaign marked a sharp break for Burger King, which had grown accustomed to double-digit sales growth in recent years as its ads drew direct comparisons with McDonald’s in a campaign that was soon dubbed ″Burger Wars.″

Despite the gains from that campaign, Burger King still trails McDonald’s by a wide margin.

Charles Glovsky, the restaurant industry analyst for the investment firm Alex. Brown & Sons Inc. in Baltimore, estimated that domestic sales for 1985 amounted to $9.3 billion at McDonald’s, compared with $4 billion at Burger King, $3 billion at Wendy’s and $2.2 billion at Hardee’s.

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