Are your throngs of regular "coffee to stay" customers – students, artists, entrepreneurs, moms with their toddlers, the unemployed – are we good enough to you? You give us a cozy place to work and study, and as of July 1st, you've given us free wifi. For those who knew to register, you really gave us free wifi long ago.
So are we good enough to you? In other words, are we profitable for you? Is this a balanced relationship?
Within the coming weeks, you will be launching the Starbucks Digital Network in partnership with Yahoo, and you'll be offering free content from the likes of The Wall Street Journal and Zagat, among others. While that's fantastic, I have to wonder, what you, Starbucks, Mr. Schultz, get out of it? More seats filled with underemployed Starbucks regulars who now have an incentive to stay longer and buy less, while the employed with expense accounts looking for a place to perch for a coffee meeting move elsewhere?
Honestly, I'm a little surprised it's taken you so long to launch this digital network. You have millions of people—30 million a month by your count – logging onto your system, and when we arrive at the Starbucks home page we see the same video about a girl who follows her dream of playing in a band while remembering her recently deceased father.
It's a very inspiring video, but if you updated the site more frequently with other inspiring videos, etc., you would have customers stay longer on your site before checking their email - and you would surely get advertisers! I genuinely mean this because, despite your detractors (who sometimes have a good point that you put out of business small, charming neighborhood coffee shops), I want you to make money. Scratch that: I need you to make money.
So when I learned that you will be launching this new site without ads, I was shocked – particularly since you're giving us access to free content, like Wall Street Journal stories, which otherwise exist only behind a pay wall! I actually checked this with a Starbucks representative, who assured me that no money will be changing hands between Starbucks and its content providers.
Now, we know why content creators are excited about this—they get free exposure to new readers, some of whom may even subscribe. But again: what's in it for Starbucks?
You say the rationale behind this is to improve the in-store customer experience. "Free Wi-Fi is just the price of admission," Mr. Schultz said at the WIRED Magazine business conference in June. "We want to create...new sources of content that you can only get at Starbucks. This is a thing that doesn't exist in any other consumer marketplace in America."
Well, you're certainly doing that. But you're improving the experience for your most devoted customers. Even if a new or not-so-devoted customer wanted to check out the new digital offerings, they'd likely have difficulty in some stores since it's so hard to find an empty seat.
A former Starbucks marketer, John Moore, told me he suspects that, while there will be no direct advertising on the new site, Starbucks is likely developing relationships with these digital content providers such that Starbucks will get reduced or free advertising opportunities on these websites and their related print properties.
I think Moore is probably right. Also, for any in-store purchases that come from existing ads on the content providers' sites, Starbucks will share in the revenue, which is something.
Who knows? Maybe Starbucks wants to keep its lingerers happy because it realizes that McDonald's is remodeling many of its stores to feel cozy and inviting, just like Starbucks.
It's also possible Starbucks realizes its fully-employed customers will keep lining up for coffee, even if there's no place to sit down. Still, Starbucks, you're being awfully kind to expand your free offerings. And you know something, I wouldn't mind an ad or two on your site. I just want to make sure that you're geting as much from us as we're getting from you.
|ABOUT THE AUTHOR|
Todd Stone is an intern at Ad Age and a student at the Columbia University Graduate School of Journalism. A comedian, Stone appeared in a national Verizon FioS commercial in 2008 and made it to the semi-finals round in Las Vegas on NBC's "Last Comic Standing."