Starbucks used to be the “it” brand in marketing circles. For years we praised its high-quality product, its infinite number of personalized orders, its friendly serving baristas, its freakishly loyal fans, and the company’s status as a “third place” in our lives between home and work. But sales are down, McDonald’s and Dunkin’ Donuts are catching up, the brand is closing stores, and the company is desperate to pump up sales. This is certainly new ground for Starbucks and its CEO and founder, Howard Schultz. But that’s no excuse for this once forward-thinking company to delve into sponsoring a second-tier cable morning show. Alas, it seems the end may be nigh for this once-proud brand.
Yesterday we learned that Starbucks has entered a marketing deal with the MSNBC show Morning Joe with host Joe Scarborough, at a reported investment of “over $10 million.” The show has officially added a Starbucks logo and changed its name to “Morning Joe Brewed by Starbucks.” The hosts suggest that in the future they might broadcast from Starbucks locations. In the video here you can see that everyone is pretty excited about the deal. In a press release, Howard Schultz even claims this is meaningful marketing:
“This relationship is an example of the targeted approach we are taking to reach our customers in a meaningful fashion and highlight our exceptional coffee and values which have built our brand from the beginning.”
I doubt the Morning Joe audience or Starbucks loyalists are very excited. For evidence, take a read of my post last year about the negative reaction to McDonald’s similar sponsorship of the morning newscast at a Las Vegas FOX affiliate. Viewers don’t appreciate the mix between their news content and marketing interruptions. Conservatives who believe MSNBC is too liberal will turn against the brand (note that FOX & Friends has the #1 cable morning news ratings spot), and I doubt MSNBC will be as quick to report in on the brand’s troubles and controversies. There is nothing positive for the viewer such as fewer commercial breaks or better reporting. This is marketing without meaning.
Fans and employees of the brand over at the Starbucks Gossip blog don’t seem to be too thrilled about this deal. Comments include:
How much “in store labor” could $10,000,000 bring for better customer service? only time will tell if this is a good investment along with the $100,000,000 spent on the new ad campaigns.”
“Also…Morning Joe?? Really?? How relevant is that show to the coveted “Gen Y” demographic I thought Starbucks was going after with the next version of its digital strategy?”
“That adds up to 1,000 barista jobs that had to be cut for this worthless programing. I’ll give it one season before it is off the air due to low ratings. No one wants to watch a 3 hour long commercial.”
The remarkably sad story here is that for years Scarborough and crew have been drinking Starbucks on air and raving about the product for free. Now it costs $10 million for the same kind of airtime on a cable news show. I submit to you that this is a microcosm of what the brand is going through now across the nation: People are no longer proud to share their Starbucks passion, and require payment in the form of advertising reminders to keep buying the brand.
And, so, a once-great brand that generated its own marketing via great experiences and word of mouth must pay its way to relevance. I don’t have all of the answers for Starbucks. I certainly prefer efforts such as the My Starbucks Idea call for fan engagement, and the free coffee on election day. These are more meaningful efforts that forge brand relationships and pride, not to mention cost a lot less than $10 million to execute. This is one big step backward for Starbucks.
I worked at Starbucks from 2003 to 2007, and at first, it was amazing. Then it fell apart. Company policy shifted from ‘customer comes first’ to a laundry list of rules, policies, and… well, bullshit. I now make it a point to NOT go to Starbucks, and there seems to be a HUGE push for ‘drink local coffee, support your local coffee shop, etc, etc.’ It once was a cool thing to get Starbucks. But now, nobody wants to overpay for average coffee and be looked down upon for it. Lose lose situation.
Starbucks has been hurt by over-expansion and dilution of their brand. I fail to see how partnering with a more conservative news program and becoming more middle of the road will serve to help them recover?
I agree that $10m could be spent on other gen-y targeted campaigns (e.g. university outreach, coffee tastings, local event sponsoring, expanded online presence) but what other American brand actually has its own television show?
This is a 3-hour long show from 6am – 9am that is watched by people with spending power. I think it was a smart investment…this is a 3-hour long commercial, that runs five days a week, that captures an audience composed of all sorts of rich people, who are not necessarily all conservative…but who cares if they’re conservative?
One of the comments you copied here slams Starbucks for not targeting its Gen-Y audience with this campaign – SO?! The same comment mentions that Starbucks has been going after this demographic w/ its digital campaigns and complains that this campaign does nothing for Gen-Y….um yeah….that’s kinda the point.
Doesn’t it make sense that Starbucks is actively participating in niche-marketing campaigns…instead of the mass-targeting of the old days?
No, Gen-Y tech-saavy, liberal kids won’t be upset that Starbucks sponsors such a ‘conservative’ TV show – cause they don’t even know it’s there…they’re NOT the target market.
And, if we applaud Starbucks fantastic techie-inspired digital marketing efforts, and its great image amongst all people that are ‘hip’ … why are we slamming that same marketing team? If nothing else, their current street-cred should give them at least the benefit of doubt amongst other marketing colleagues.
Great comments, gang.
I think Drew and Stuart both make a point that this sponsorship takes the brand away from being “special” and premium. There’s nothing special about “Morning Joe” as a program, and Lateef, to your point, a 3 hour commercial will turn off both viewers and Starbucks fans alike.
The overall point for me is that Starbucks became a big, leading brand with virtually zero traditional marketing spending. Why does the marketing team believe that the answer to getting back on top is to drop tens of millions of dollars into executions that any other coffee company might do?
I agree with Drew’s comment about the push being towards supporting your local coffee shops – not so much with the comments that connote that Starbucks is ‘selling out.’
Once you get out of the metropolitan cities where gourmet coffee shops thrive, and into the suburbs, you’ll realize that there are practically no other gourmet coffee shops other than Starbucks.
This poses a huge untapped market for Starbucks – people that don’t know the difference between a McDonald’s or Office cup-of-coffee and a freshly brewed free-trade cup of joe from Starbucks.
A big market also exists in the corporate (or even small business) world. Businesses can purchase all sorts of services from Starbucks – like an Interactive brewing machine or just weekly coffee delivery. This is a lucrative market.
Like everyone else Starbucks is feeling the economic squeeze, but going for the same old sponsorship campaign as every other unspecial corporation on the block is going to hit a brick wall. Starbucks should focus more on offering additional services that are just as unique and premium as their coffee. I can’t tell you how many small business owners and execs (myself included) use Starbucks as a landing/launching pad, and having additional communication services would get me to Starbucks more often than not. Same goes for my business compadres.
I absolutely love the direction of your thinking on additional services for Starbucks customers, Stephanie. First, there are so many directions that this could go in – everything from adding a printer to paying for a career coach to speak at a store in the afternoons. These services would get people into the store and build a very strong brand attachment, they would likely generate strong word-of-mouth and free PR (including free coverage on morning news shows!). Just putting a Starbucks logo on MSNBC for $10 million adds absolutely no value.