Marketing Fails: McDonald’s Olympic Blunder & Sony's PSP Misstep

What do you get when a fast-food giant runs out of food during the Olympics and a tech titan tries to outsmart Nintendo with a grassroots campaign? Two colossal marketing failures that left customers frustrated and brands scrambling.

In this episode, we explore how McDonald's 1984 Olympics promotion backfired, costing the company tens of millions and leaving customers empty-handed when they ran out of fries, buns, and even Coca-Cola. We also dive into Sony’s desperate attempt to boost PSP sales with the “All I Want For Christmas is a PSP” campaign, which fell flat in the face of Nintendo’s dominance.

For more Marketing Fails check out B2B Growth on YouTube: 
https://www.youtube.com/@b2bgrowth

Episode Transcript

Speaker 1 (00:04):
Hey, everybody, welcome in to this episode of B to
B Growth. Today we're doing something just a little bit different,
and we're gonna take what we've been doing over on
YouTube and bring it here to our audio podcast. So
if you go to our YouTube channel right now, you'll
see we have this playlist of videos that James has

(00:24):
been creating and we're talking about some of the biggest
marketing fails of previous generations or even recent ones. So
today I'm gonna pull two of those stories for you
to listen to, and then I want to encourage you.

Speaker 2 (00:40):
If you like the.

Speaker 1 (00:41):
Content you're hearing, go over to our YouTube channel, check
it out, subscribe so that you never miss anything that
we are putting out. So, without any further ado, you're
gonna hear two marketing fails stories on this episode. First
we'll talk about McDonald's and then right out after that
we'll talk about the PlayStation Portable, the rise and the

(01:06):
marketing fail of the PSP. Check it out.

Speaker 2 (01:11):
The twenty twenty four Olympics were insane, the Last Supper fiasco,
the Turkish sharpshooter, the Simone Biles come back, the viral
crotch video of that French pole volter. The twenty twenty
four Olympic memes were epic and abundant. Because there's so
much attention on these games, there's obviously a massive marketing
opportunity for brands. But if you're not careful, that opportunity

(01:33):
can blow up in your face, which is exactly what
happened to McDonald's in nineteen eighty four when they pissed
off millions of customers and lost tens of millions of
dollars in the process with their Olympics promotion. And before
I get into the details of their disastrous campaign, let
me set the stage a little bit. In the background
of the Paris Games, you could see Chase's luxurious river
lounge and Anheuser Bush showing off their non alcoholic beer.

(01:57):
In retrospect, the scene wasn't that much different in nineteen
eighty four in La The US was fresh off of
a hiatus after skipping the Summer Games in nineteen eighty
in Moscow. To say tensions were high would be a
massive understatement. The US boycotted the Olympics in nineteen eighty
as a protest against Russia's invasion of Afghanistan. They weren't alone. Either.
Several big names with major athletes skipped the show. This

(02:20):
meant Russia and the Soviet Bloc walked away with tons
of medals, just about all of them. Incomes nineteen eighty four,
America was the host, boasting the city of la as
their destination after watching metal after medal go to their rivals.
In nineteen eighty, American athletes were ready for their revenge.
To put it frankly, American teams were loving it, so

(02:41):
naturally McDonald's chimed in with a massive sponsorship. The campaign
was dubbed when the US Wins, You Win. The giveaway
was hosted to a scratch off card. When a customer
ordered anything at McDonald's, whether it be one small fry
or dinner to feed the whole family, they got a
scratch card. They would scratch it to reveal an Olympic event.
Say you went out for lunch with a few friends.

(03:01):
You scratched your card and revealed men's four hundred meters hurles.
You went home and watched Edwin Moses take home the
gold in that event, and then you returned to McDonald's
and hand it over your card. Because the US one
gold you won a fresh free Big Mac. This promotion
obviously aimed to drive traffic to stores and solidify the
longtime partnership between McDonald's and the Olympics. At the same time,

(03:22):
McDonald's was positioning itself as a proud American staple in
a time when patriotism was high, and this idea wasn't
brand new to them. In the nineteen seventy six Olympics
in Canada, McDonald's ran a similar promotion as a sponsor
of the games, and it worked exceedingly well. Looking at
the cost of the promotion in seventy six compared to
the increase in revenue, they could safely assume it was

(03:43):
worth the investment. Again, they paired these numbers to the
number of medals the US one in nineteen seventy six.
At the end of all, the mass running this campaign
in the US for eighty four looked really good on paper,
and people really liked it. It was fun, got attention, and,
much like their famous Monopoly game, ushered in customers with ease.

(04:04):
But there were a few key factors that went overlooked. First,
the US only won ninety four medals in the nineteen
seventy six Olympics, with only thirty four of those being
gold gold medals, and in turn Big Max were a
major loss leader here, but with those odds it seemed
worth it. Second, they seemed to completely overlook how fired

(04:24):
up the American athletes and fans would be in nineteen
eighty four. After all, they were returning after missing an
entire set of games in the middle of a hot
political environment. People were hungry for revenge, so they took
the jump to roll it out nationwide for America's return
as host in nineteen eighty four. They created a massive
marketing campaign to get the word out. People started flocking

(04:46):
to McDonald's just for the sake of getting these cards,
and millions of Americans had their cards ready to go
when the torch was lit, highlighting the schedules for each
event that could earn them a treat from the Golden Arches.
As the ads rolled across the screen, people got to
talking about it more and more. Really, the campaign created
a spark similar to a viral TikTok today. People were
on board and ready. When Alexi Gruele took gold for

(05:08):
the first event Men's road race cycling, people cheered America
was back, ferocious and going to get a lot of
free Big Max. Then Connie Carpenter Finney took gold in
the Women's road Race cycling event Q More cheers, more excitement,
and more Big Max. The story continues in this fashion
event metal Cheer. McDonald's customers began making jokes about the

(05:32):
fast food chain, which only brought more attention to the
drastic events happening at order counters across the nation. Despite
the chaos and the massive cost, McDonald's continued the promotion
instead of pulling it. Pulling the plug during such a
proud moment in American history was sure to mean that
the reputation of their golden arches would get tarnished. Then

(05:52):
they started running out of inventory. Fans would flock to
the Newar's location, only to be met with disappointment. The
stores were out of fry buns and Coca Cola was
nowhere in sight. Across the country, fans were reveling in
the major US victories and getting hungry in the process.
As soon as trucks would unload supplies, they would go
right out the door to customers, leaving locations forced to

(06:14):
close or turn customers down. Around sixty six hundred stores
reported closing or limiting menus due to a lack of
promotional items, one of which was the company's namesake, the
Big Mac. Keep in mind that all of this traction
that was forcing restaurants to close was still coming in
at a loss. Because of the free promotion, customers were
getting the Olympic victory prize and walking right out the

(06:35):
door without needing to pull out their wallets at all.
At the end of the games, the US boasted eighty
four gold medals, sixty one silver, and thirty bronze, awopping
one hundred and seventy four total medals, a mcvictory to
say the least. They keep the exact results of the
promotion a secret, but they have admitted it was the
most costly marketing campaign in the company's history. Researchers and

(06:57):
financial experts estimate that it cost them several millions of dollars.
McDonald's went on to run similar promotions for the Soul
nineteen eighty eight Olympics, but this time they gave out
promotional pins and cups instead. This helped bring customers back
to the store without completely wiping out their top selling products.
They continued these campaigns, adding plates and other McDonald's Olympic

(07:17):
products for each set of games. After learning their lessons,
the campaigns were extremely successful. Maybe not enough to make
up for the multi million dollar loss in eighty eight,
but they're McDonald's. They are going anywhere. Still. The stunt
has been a talking point in marketing classes, Olympic conversations,
and even the Simpsons.

Speaker 3 (07:36):
It's all part of our Krustyburger Olympic sweepstakes. Just scratch
off the name of the Olympic event on your game
card and if America wins a gold medal, you win
a free Krusty Burger.

Speaker 2 (07:50):
Earn cut.

Speaker 3 (07:52):
How much are these free Burger's gonna cost me? Let's see,
you personally stand to lose forty four million dollars.

Speaker 2 (08:02):
It goes to show that just because a marketing campaign
reaches your intended audience and they take action on it,
it doesn't necessarily mean that you win. If you want
more stories like this, tap that like button somewhere down
there and subscribe for more. Sony's Christmas PSP campaign in
two thousand and six. In the early two thousand, Sony

(08:23):
was already changing the narrative and the target demographic behind
the video game industry. Sony PlayStation two will be the
biggest thing to come along since TV was invented.

Speaker 3 (08:33):
PlayStation two, PlayStation.

Speaker 2 (08:35):
Waystation two there was fastest video game system ever. They
were putting out games that were different, more challenging, and mature,
so older kids and adults were buying PlayStation consoles for
their own enjoyment, not just as luxury gifts for younger kids.

Speaker 3 (08:49):
I'm right here for the PlayStation two, the best entertainment
system to hit the world.

Speaker 2 (08:56):
It's going to be great.

Speaker 1 (09:02):
PSP.

Speaker 2 (09:03):
Bring in the release of the PSP and behind me here.
What you're seeing is a demonstration of the various features
that PlayStation Portable has, from music, games, movies.

Speaker 1 (09:14):
And more.

Speaker 2 (09:15):
Sony's handheld gaming system to rival Nintendo's DS. They were
released right around the same time, and Sony was looking
for gaps in Nintendo's market. Nintendo's strategy was simple, make
DS games that younger kids love, hinge on the nostalgia
of Nintendo and expand the female demographic. Nintendo already saw
success with the Game Boy, so they were unfamiliar territory
and have the notoriety to back it up. When Sony

(09:36):
launched the PSP, they had a major problem sales weren't
as good as they expected. The console's predecessor, the PS two,
was still outperforming the new PSP and the PS three
in sales. Sony needed to increase PSP sales fresh out
of launch and keep holiday season sales high. The PSP
was Sony's chance to stay ahead. In the final months
of two thousand and six, Sony filled the gap in

(09:58):
Nintendo's market. Weren't marketing to teens and adults, which was
conveniently the same demographic Sony had already tapped into, so
they went after it. But why would teens want to
spend their hard earned allowance money to buy a handhold
console that essentially offered the same experience as PS two
that they probably already had at home. Tapping into this

(10:18):
market would prove to be difficult. Nintendo's campaigns were crushing,
with ninten Dogs being the talk of the town going
into the Christmas season that year. Sony was in trouble.
The only solution, it seemed, was to start a grassroots
campaign to cut into Nintendo's success. Sony didn't have the
hype that Nintendo did, but they could create.

Speaker 1 (10:38):
It, getting so crazy they totally amazed me. God ask
my mama one for es. Yes, I love for Christmas.

Speaker 2 (10:57):
This is where all I want for Christmas is PSP
was born. The website a blog was run by three teenagers, Charlie, Jeremy,
and cousin Pete. As the story unfolded, Charlie had a
PSP of his own, but Jeremy did not. To get
Jeremy's parents to buy him a PSP, they started clowning
with some not so subtle hints to Jay's parents that
a PSP would be the perfect gift. The blog continued

(11:20):
to evolve into nothing short of a disaster. The language
used was labeled as illiterate jargon, not the cool kid
kind of vibe they were going for. Then the rap
video came out. The offbeat, messy, and poorly produced video
went viral for all the wrong reasons. In the video,
cousin Pete continued the plea for a PSP for a
Christmas present from Jeremy's parents. The two thousand and six

(11:43):
Internet responded with hundreds of comments on the blog saying
this had to be a marketing campaign because even during
the cringiest period of the Internet, no real person could
create something this bad. Yes, the slaying the kids used
wasn't relevant. The rap video showed cousin Pete flaunting enough

(12:05):
cash to buy several PSPs, and all of the teenagers
teenagers appeared to be much older adults, too old to
be making desperate pleas to their parents for a PSP.
Then comments calling out the site as a marketing stunt
were quickly deleted, proving that someone at Sony must be
behind this. It was way more than a thinly veiled
marketing stunt. The terrible grammar of the lack of enthusiasm

(12:28):
and skill, and the production of the rap video and
the monitoring of comments felt insulting and humiliating to the
same demographic Sony was trying to attract. Consumers were appalled
with Sony. Were they really so out of touch that
they thought this would work? They were even more annoyed
that this was how the company thought of teenagers. One
of the top arguments was that Sony would rather create

(12:48):
fake dialogue to promote sales that initiate real conversations to
make products that the target market would want to buy.
Early Internet detectives hit the case and quickly proved that
the domain was owned by Zippotoni, a marketing firm that
Sony hired in secret to promote the ruse cousin P
was actually employed by Zippotoni, and his employee picture was

(13:09):
readily available on their own website. Even when calling Sony
out on their stunt with the evidence in the comment section,
the three teens profusely denied any involvement with Sony. A
quick call to the FTC prompted a short lived investigation
that proved Sony was behind the site, leading Sony to apologize.
But even in the apology, Sony kept up the strange

(13:29):
and poorly received teenager act, saying things like maybe your
speech was too funky fresh, which just amplified the failure
on an even larger scale. But even with this terrible
execution of a marketing campaign, the problem laden PSP did
not halt Sony's overall success. As we all know today,
Sony sold seventy six million PSP units during their ten

(13:50):
year run on the product, while Nintendo sold more than
double that with their DS line. However, Sony would see
incredible success with their PS four and PS five. Other
accessory and expansion lines like the PlayStation Move would seem
moderate success as well without the added marketing flops. So
what can marketers learn from Sony's two thousand and six
marketing fiasco? Number one, get to know your audience. Marketing

(14:14):
should build rapport, create conversations, and open up back and
forth dialogue with your customers, not assume characteristics of your
consumers to push sales. Number two, keep it real. When
you're waiting into new markets, speak to what you know.
Talk about your product, the value it can bring, and
how you're trying to solve problems or create opportunities. Impersonating

(14:36):
teams never works. In today's world, we see brands attempting
to reach gen Z or jen Alfha by pulling the
old hey kids, I'm cool too routine, and they get
called out quicker than ever before thanks to social media.
By creating conversations, learning and only speaking to what you know,
your company will be respected, not mocked. And let's be real,
you still might get mocked anyway. The Internet's brutal. The

(14:58):
last lesson we can learn bounce back. In Sony's situation,
they held the cards. They had just experienced several years
of incredible success with the PS two, which is still
the best selling video game console of all time. They
could have used their Notoriety as their platform, but instead
chose to make a terrible shot in the dark, fake
website to promote their new product in the final hours

(15:19):
before the Christmas boom. But they learned from their mistake
and you can see it in the marketing of the
PS five. Their Live from PS five campaign was launched
after shelves were restocked with the console in twenty twenty three,
two years after that product launched. The campaign was a
series of short videos designed to look like breaking news coverage.
They showed popular video game characters in real life scenarios,

(15:42):
showing off the immersive experience that the PS five created.
Flops happened, learn from them and get better because of it,
Sony did. If you want to see more stories like this,
tap that like button right down there and subscribe for
more