Friday, October 24, 2008

BBDO Closes In on Starbucks Business?

Starbucks is prepping to shift ad duties to Omnicom Group's BBDO just weeks after its former agency, independent Wieden & Kennedy, split with the coffee chain.

Starbucks which works with a number of advertising agencies around the world, As other coffee suppliers are hitting hard at Starbucks, McDonalds and Dunkin’ Donuts to name a couple, they are asking a number of their agencies to provide ideas on how to move the brand forward but have.

BBDO currently has ties to the coffee chain through another client, Pepsi. Starbucks has worked with Pepsi since 1994, when the companies created a joint venture to develop and distribute Frappuccino. The partnership has since expanded to include DoubleShot espresso and DoubleShot Energy & Coffee.

Any additions with working with BBDO aren't likely to mean an agency-of-record relationship. The thoughts going around on Starbucks is that it will use different shops on a per project basis.

Starbucks, witch does have a reputation as a difficult client in ad circles, has previously worked with BBDO sibling Goodby, Silverstein & Partners and Interpublic Group of Cos.' DraftFCB.

Starbucks is in the midst of a difficult year. The chain posted its first quarterly loss in July; it is closing 600 stores and eliminating another 1,000 jobs. Competition is becoming increasingly fierce, with McDonald's McCafe and Dunkin' Donuts, are becoming more aggressive in their advertising. The doughnut chain launched the new campaign "Dunkin' Beat Starbucks" earlier this month, touting results of an "independent taste test." (see previous blog)

Last year, Starbucks spent less than $40 million on domestic measured media, according to TNS Media Intelligence.

However, it seems that CEO Howard Schultz seeing the importance of marketing, and plans to give it a boost in the very near future. Mr. Schultz has acknowledged that Starbucks must combat the Dunkin' Donuts and McDonald's of the world. It seems he is also looking to build the brand in terms of selling coffee that people can make at home.

Larson note: I have been known to sip some Starbucks more than once or twice in my life. But in marketing it takes more that me sipping a cup or two or three. Given a choice between Starbucks, McDonalds or Dunkin' Donuts you will see me sipping Starbucks more often than the other 2, but through in Caribou and Seattle’s Best and I'm hard pressed, but my favorite cup is at my very own kitchen table, with freshly ground beans from my own little grinder. If Starbucks does indeed put forth a good effort to market into my home coffee pot they might just get back on top of the pile.

Howard Larson
Larson & Associates
Telesales & Target Marketing Professionals for new account acquisition
Making good businesses great and great businesses even better

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