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Open Letter to Starbucks: Embrace New Media to Preserve Authenticity

by Seni Thomas  |  
November 30, 2007

To Starbucks: Media blasts won't help your bottom line
Starbucks is a company I try to hard to hate, but can't, which is more than I can say for most.

For those of you who haven't heard, those poor fellows at Starbucks experienced their first decline in customer traffic, EVER. Keep in mind, this is after they expanded from 3,000 to 10,000 US locations in two years. Naturally, management had a pow-wow, someone raised their hand and said, "Doesn't advertising increase traffic?", to which everyone nodded, and by the end of the day an advertising budget proposal, in the millions, was on the CEO's desk. Who wants to bet TV buys will make up the majority of the budget?
Taking a step back, the reason I have such a hard time being negative about Starbucks is that up to this point they never advertised, by extension meaning they never annoyed, or interrupted me. By not advertising they somehow held on to their authenticity of being the "third place", even though I can stand on a street corner in Manhattan and spot 3 locations. In addition, by not advertising they never shoved a message or image down my throat telling me what their brand should mean to me. It was ambiguous and I defined it in my own personal way. Even now I can't describe the feeling of escaping the bone-chilling New York winters to grab a cup of coffee, jump on my laptop, and meet up with a friend.
Those of you that read my blog regularly understand that I'm not a 100% new media evangelist and I still believe that there is a place for traditional broadcasts; however, I also believe the mass blasts should only be used to increase awareness for new products, time sensitive promotions, and differentiation in low-involvement, saturated markets (ie. toothpaste). Starbucks doesn't fall into any of these categories and is in fact one of the must ubiquitous brands in the world.
If their goal is to increase customer traffic I am confident that a new media approach would be far more effective.
A very simple example would be to extend the online component of Starbucks' previous "Chain-of-cheer" campaign where they passed out gift cards and subway passes in hopes that you would in turn do something nice for someone else. Great concept, and they had a website where you could login and track your chain of cheer. However, the effort was geographically limited. The simple solution would be to activate this campaign nationally and globally by activating Starbucks lovers online through social tools like Social Networking Sites, Twitter, etc. Take this one step further and partner with multiple charities (Maybe even to increase working wages for coffee farmers?) where people can pledge $1 and pass it on to their friends who also pledge $1. A campaign like this has the added benefit of expanding outside traditional Starbucks customers and humanizing the brand to their critics who traditionally charge Starbucks of being an uncaring corporate behemoth bankrupting mom & pop shops and enslaving coffee growers.
By embracing new media, and talking to consumers on a personal level, Starbucks can still preserve their place, at least in my mind, as my corner coffee shop - perhaps it is just a manifestation of denial that somehow I believe my Starbucks is unique. Then again it might just be that there is a lot of terrible coffee being doled out by delis in New York.
Can you think of any other brands that don't advertise yet are extreme successful? Or, companies that can do a better job of embracing social media? How can Starbucks better leverage social media tools?
UPDATE: I wrote this post before the TV ads broke and Starbucks has chosen to go with the "Pass The Cheer" theme again. Why not build online activation touch points around the TV efforts? That said the ads have a great look to them and you can see them all here.
UPDATE #2: BrandAutopsy just posted a fantastic series of archived posts on this subject.

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Seni Thomas

senithomas1 [at]

Guided by his passion and thirst to evolve the ad-scape, Seni developed The Ad-Vocate. The key to igniting change is empowerment through knowledge; thus, Seni sought to create a location where students and young professionals could be exposed to the cutting edge advertising/marketing ideas that educational institutions simply aren't providing.

Seni Thomas was born in Tokyo, Japan and lived throughout Southeast Asia before settling down on the island of Maui. After enduring a severe case of Island Fever he jumped ship to NYU's Stern School of Business in good old New York City studying Marketing and International Business. Professionally he is driven by an entrepreneurial spirit which led to him founding a web development and computer repair company at 14. After a quarter life crisis at 15 - after a summer working 40 hours a week at Boeing R&D on Maui - he decided to pursue his other passion of marketing - essentially the study of people and why these crazy creatures do what they do. Interesting stuff. Since then he has dabbled in everything from launching Alternate Reality Games, to ethnic fashion marketing, to in-game ad placement at Massive Inc., to aiding in the launch of Verizon's FiOS television service.

Check out my LinkedIn Profile.

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  • by Paul Williams Fri Nov 30, 2007 via blog

    Seni - It looks like you and I have a theme going today! Thanks too for linking to Brand Autopsy... John and I took that discussion very seriously. Starbucks has always been an interesting topic. The fact that there is no other brand quite like it makes it fascinating and challenging at the same time.

  • by Elaine Fogel Fri Nov 30, 2007 via blog

    I appreciate what Starbucks has done as a brand, however, am I alone in saying that their coffee doesn't thrill me? Maybe I'm a simple gal, but give me a Tim Horton's coffee any day and I'll be happy. No fancy upholstered chairs, no exclusive CD's and the price is affordable. Wish they'd open up in my neck of the woods.

  • by Lewis Green Fri Nov 30, 2007 via blog

    Seni, I like your idea. It is authentic to Starbucks thinking in the late '80s and throughout the '90s that Starbucks brand is built by partners and customers, not at the Support Center in Seattle. See my comment to Paul's piece.

  • by Seni Thomas Fri Nov 30, 2007 via blog

    First of all there are so many great conversations that take place around blogs, so I hope everyone jumps on the CoComment bandwagon so we can extend these conversation. BTW, I'm not affiliated, it's just a great service that tracks all your comments across the web. @Paul I'm glad you decided to hit this topic as well, as you approached it from a different, and compelling angle. Plus, it's great to hear it from an ex-insider. Again, for anyone reading this who missed the update at the bottom of my post, hit the link to BrandAutopsy and read through the collection of Starbucks related posts. @Elaine 100% agreed that there is far superior coffee out there, but Starbucks is consistent and the coffee apparently has more caffeine in it (forgot where I heard that). However, most importantly if you ever need a place to meet up or get some work done anywhere in the world you know you can drop by a Starbucks. @Lewis I agree with your stance on Starbucks stories being played out. I personally cringed when using the phase "3rd place". It did get overhyped and they lost a level of authenticity already, which is why I don't believe they should be pushing holiday TV spots. Plus, as a recent college grad I spent countless hours working on multiple versions of the same Harvard Starbucks Case Study.

  • by DJHowatt Fri Nov 30, 2007 via blog

    Seni, I'm not sure I agree with some of your assumptions: 1)"by not advertising they never shoved a message or image down my throat telling me what their brand should mean to me" Advertising and branding are not synonymous. Starbucks has a very nicely orchestrated brand experience in your local outlet which appears to be acceptable to you. Also, good advertising is never something that's shoved down a viewer's throat; it has to be relevant and acceptable too. 2)"a new media approach would be far more effective" The merits of new media aren't pertinent to their advertising decision. Can't/shouldn't they do both? 3)"Can you think of any other brands that don't advertise yet are extreme successful?" The fact that many of us cannot name companies that don't advertise may well be the proof of the importance of advertising in a marketing mix.

  • by Tangerine Toad Fri Nov 30, 2007 via blog

    @Seni: Great idea. A new media centric approach would have been the smartest thing they could have done. It would have *Gotten them lots of press for putting lots of money into new media *Made them seem smart and forward thinking- a tomorrow company rather than a yesterday one *Allowed them to reach their customer base without annoying them *Allowed them to keep the upscale image that enables them to charge $5 for a cup of coffee. @DJ: One of the core tenets of the "new economy" is the list of the strong brands that sprung up over the past 15 years without resorting to traditional TV and print advertising, relying instead on in-store experience and WOM: Starbucks, Amazon, Whole Foods - those are the 3 main examples.

  • by johnmoore (from Brand Autopsy) Fri Nov 30, 2007 via blog

    Yo Toad ... here's the problem, SBUX is a very controlling company. They may talk about themselves as being bottom-up, but they are top-down all the way. They don't "franchise" for a reason, they want to control quality. They are super-protective in their media relations ... so much so that PR stands for "Private Relations" at Starbucks. They have had plenty of time to blog, but they have chosen not to. (They did a coffee podcast in 2006 but ended it quickly after receiving harsh feedback.) I would so love for SBUX to embrace social media. However, the culture of the company is more of control than of giving up control.

  • by Tangerine Toad Fri Nov 30, 2007 via blog

    @JM: That's interesting. Wasn't actually thinking blogging and social media as much as a site that played up the "Give Cheer" campaign- or something else holiday-oriented- and probably had coupons or similar, maybe had a viral aspect to it. The new TV campaign doesn't make a lot of sense, unless they've made a conscious decision to go after the lower middle portion of the audience, which is possibly the only space Dunkin Donuts and McDonalds can compete with them.

  • by johnmoore (from Brand Autopsy) Fri Nov 30, 2007 via blog

    Toad ... SBUX has a site that plays up the "Pass the Cheer" campaign:

  • by Gary Cohen Sat Dec 1, 2007 via blog

    Seni - Let me say up front that I am not a huge fan of Starbucks coffee. I am of the opinion that Starbucks has been all about new media - in the sense of earned media as opposed to paid media. People have spent tons on creating WoM programs, seeding conversations, blogger and social media outreach, buzz and viral campaigns and so on. Starbucks moved the goal posts, reframed the question and changed our lives - and did it without intrusive advertising. And all along the way, they created an experience that their customers wanted to talk about and did talk about - online and off line. But they never joined the conversation. And they never started the conversation. They just let it happen. And because the experience was focused and for all the reasons that John and Paul discussed at Brand Autopsy, the diversification helped the bottom line but diluted the brand. And did their hyper growth result in cannibalization from other Starbucks stores and ultimately lead to less customers per store? The experience was great when they focused on their core. As Starbucks has grown to be on every second corner, they have also become part of life and diluted themselves to an a most commodity level - Which is the exact anntithesis of who they were. I keep thinking: What would have happened if people had not spread the word? Would they have advertised then?

  • by Elaine Fogel Sat Dec 1, 2007 via blog

    Seni, you are correct. I often meet new clients at Starbucks. It's a relaxing atmosphere and conducive to short business meetings.

  • by Harry hallman Sun Dec 2, 2007 via blog

    If Starbucks wants to increase store traffic, they can do one simple thing. Provide free WIFI. Almost everyone else does and, while I like Starbucks and my business partner loves them, we often meet in competitive coffee shops so we can have free access. If we are going to spend $20 -$30 bucks (we drink a lot of coffee) at last we can have a free connection. Just my opinion.

  • by Tangerine Toad Sun Dec 2, 2007 via blog

    @JM: That site could/should have been a lot more than it is. For starters. But I'm not going to try and solve their marketing issues on here ;) Read through your posts on BA about Starbucks, which are very interesting and provide great insight. But Starbucks issues are not that unique: Most businesses face the issue of who they are once they achieve the sort of growth and ubiquity Starbucks has. It seems to me their choice boils down to this: 1. Become a large national chain that appeals to a vast middle. 2. Go back to being an upscale, pseudo-local chain that appeals the the upper end of the market. Lots of arguments to go either way. They still do not have any significant competition. McDonalds and Dunkin Donuts have vastly different in-store experiences and will compete for the drive-by or office segment- people who want to buy a quick cup of coffee to consume elsewhere.

  • by Tangerine Toad Sun Dec 2, 2007 via blog

    PS: As for free wi-fi, their problem is that it seems most people initially assume they have free wifi, because they've seed so many people going online at Starbucks. Thus it's something of a surprise to learn that all those people were actually paying T-Mobile for the honor.

  • by Valeria Maltoni Sun Dec 2, 2007 via blog

    Seni: I missed welcoming you to the Daily Fix. I'm a bad, bad reader! I've got something unique to offer here so far, one example of a company that does well without advertising -- Anthropologie. I've written them up twice after doing an event at their flagship store in Wayne, PA and meeting Glen Senk, the President. Kudos to Ann Handley for signing you up!

  • by Ann Handley Mon Dec 3, 2007 via blog

    Anthropologie: Will go searching for your posts now, Valeria, as it's one of my all-time favorite clothing stores.

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