BBDO Closes In on Starbucks Business

Agency to Pick Up Parts of Account That Were With Wieden

By Published on .

NEW YORK (AdAge.com) -- 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 following a rocky relationship, executives close to the matter said.

Agency representatives either declined to comment or could not be immediately reached. In a statement, the marketer denied an agency shift had taken place.

Choosing words carefully
"Starbucks Coffee Co. works with a number of advertising agencies around the world," a spokeswoman said in an e-mail. "Recently, we made the decision to evaluate our agency work in support of the overall brand. We are asking a number of our current agencies to provide ideas to move the brand forward but have not yet made any decisions."

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 expanded duties at BBDO aren't likely to mean an agency-of-record relationship, though. The expectation is that going forward Starbucks will tap various shops on a project basis instead.

Starbucks, widely noted as a frustrating client in ad circles, previously worked with BBDO sibling Goodby, Silverstein & Partners and Interpublic Group of Cos.' DraftFCB.

Storm brewing
Starbucks is in the midst of a difficult year. The chain posted its first quarterly loss in July, is closing 600 stores and eliminating another 1,000 jobs. Competition is becoming increasingly fierce, with McDonald's McCafe launch gathering steam and Dunkin' Donuts becoming more aggressive in its advertising. The doughnut chain launched the new campaign "Dunkin' Beat Starbucks" earlier this week, touting results of an "independent taste test."

The ubiquitous brand historically hasn't been a big ad spender. Last year, it spent less than $40 million on domestic measured media, according to TNS Media Intelligence.

However, one executive close to the matter indicated that CEO Howard Schultz is coming around on the importance of marketing, and plans to boost marketing dollars in the near future. Mr. Schultz has acknowledged that Starbucks must combat the Dunkin' Donuts and McDonald's of the world, and he is also keen to build the brand in terms of selling coffee that people can make at home, given the anticipated "nesting" next year as consumers spend less time and money out of home, the executive said.

Comments (1)