How Starbucks Could Do TV Ads

For now, the slumping coffee chain has bought a few print ads. A nationwide TV campaign could provide the real boost

By Burt Helm

As Starbucks (SBUX) grew into one of the world's best-known brands, it rarely advertised on television. It didn't have to. The chain was once so trendy and one-of-a-kind—remember Tom Hanks marveling at the detailed ordering process in 1998's You've Got Mail?—that customers knew what it was and didn't need the reminder to go hang out there.

The honeymoon is over. It isn't just that a "tall decaf cappuccino" sounds as common as coffee; millions of customers won't shell out for one, and the chain has had to go downscale with combo meals and loyalty cards. On Apr. 29, the company said sales in the quarter ending Mar. 30 had fallen 7.6%, to $2.3 billion, with foot traffic down 5% in stores open at least a year. Meanwhile, McDonald's (MCD) is building cheaper, Starbucks-inspired "McCafés" in its stores and carpet bombing the airwaves with a $100 million campaign to promote its new coffee drinks. Starbucks, with familiar products and major competitors, is now a mainstream brand with a mainstream brand's problems.

So shouldn't it employ the mainstream marketer's trustiest weapon, the big TV ad campaign, to lure customers back? Unfashionable as it sounds, TV is still the most efficient way to sell an everyday product to millions of people. Ask any marketing veteran. "The power of audiovisual on a captive audience is huge," says Joshua Spanier, director of communications strategy at San Francisco ad agency Goodby, Silverstein & Partners, part of the Omnicom Group (OMC). Even as more people fast-forward through ads using a digital video recorder, TV delivers a bigger audience than any other medium.

Warning Against Imitators

And unlike a viral video or outreach on blogs and social networks, which requires users to pass the message on, television delivers an advertiser's message to the most passive couch potato, guaranteed.

CEO Howard Schultz has his own ideas for drumming up business, of course; Starbucks says it has no plans for television now.

On Apr. 30 the company unveiled a new slogan, "It's Not Just Coffee. It's Starbucks," and kicked off a coffee-focused newspaper ad campaign in papers including The New York Times (NYT), warning against down-market imitators like McDonald's. "Beware of Cheaper Coffee. It Comes with a Price" reads one ad that ran on the back page of the Times' Sunday Business section. The campaign also includes a YouTube video, with Schultz asking fresh-faced baristas what they think of the other print ads in the new ad campaign, like one that reads "This Is What Coffee Tastes Like When You Pour Your Heart into It." Unsurprisingly, they rave. The Seattle chain also maintains a Facebook page.

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