Starbucks battles falling visitor numbers with TV push

by Nikki Sandison, Brand Republic 16-Nov-07, 09:00

NEW YORK - Starbucks is launching its first national TV advertising campaign in the US as it reports a drop in customer visits.

The world's largest coffee chain reported a 35% increase in quarterly profits but the company dropped its earnings forecasts for next year after revealing that the number of visits to its US stores had fallen.

The campaign by Wieden & Kennedy marks the first time that Starbucks has advertised on national TV, having previously relied on its storefronts and cups as the core of its marketing.

Starbucks portrayed the advertising as part of its development as a business, but sceptics will see it as evidence that the chain is losing its popularity.

The advertising campaign has a holiday theme and is based on the idea of "Pass the cheer", encouraging customers to help one another. It includes a website, www.itsredagain.com, where visitors can post stories about their experiences with passing on cheer.

There will be three animated 30-second TV spots, the first of which breaks today on cable networks.

Jim Donald, Starbucks CEO, said the company is trying "to reach out to a broader audience" with the advertising campaign.

Howard Schultz, founder of Starbucks, said: "I wouldn't read into the advertising initiatives too much. I think it's a natural evolution of the maturity of the brand and the experience. And the fact that we think we can get enormous leverage gaining the national footprint we have in major markets as a result of a TV campaign."