Why Chipotle Ditched Ad Agencies

NEW YORK (AdAge.com) -- For Chipotle, advertising agencies have, for the most part, outlived their usefulness. The brand still works with Compass Point Media, a division of Campbell Mithun in Minneapolis, on media buying. But it cycled through Mother, New York; TDA Advertising & Design, Boulder, Colo.; Devito/Verdi, New York; and Butler Shine Stern & Partners, San Francisco, between January 2004 and November 2009. Mr. Crumpacker points out that the chain hasn't added a menu item in 17 years and it also does not have a regular cadence of pricing promotions. For those reasons, he said, agencies' experience with other fast food chains is irrelevant. Last November, Chipotle made the decision to go it alone and bring advertising in-house. After spending at least six months selecting Butler Shine from a group of 27 agencies, Mr. Crumpacker said it didn't make sense to take the time to pick another agency. "By the time we picked one and got them up to speed it would have been a year," he said. "The only reasonable thing to do was to do it ourselves." The chain is shifting away from traditional advertising anyway, Mr. Crumpacker added, noting that advertising, generally, is becoming less important to Chipotle. Not to mention that Chipotle's co-CEO, Steve Ells, isn't exactly supportive of advertising. "For Chipotle, I guess I'd say [advertising] is not less important to our CEO, because he never thought it was that important," Mr. Crumpacker said. "He's asked me [whether] should we do advertising at all." But, Mr. Crumpacker is not without a sense of humor about his position as head marketer at a company that puts little value in advertising. "[I told our CEO], if you're not going to let me do advertising, you're kind of making this job pointless," he said. On a more serious note, he said that his job is to get the word out about Chipotle's commitment to "food with integrity" and that it's not owned by McDonald's, something that still confuses some consumers. Chipotle uses naturally raised meat, supports local family farms and spends more on organic foods as a percentage of sales than its competitors, Mr. Crumpacker said, all facts that many consumers are not aware of. "We've looked at TV; we've looked at it all," Mr. Crumpacker said. "Chipotle was built on word-of-mouth marketing. We're focused on reigniting word-of-mouth marketing, rather than big advertising campaigns." With that in mind, Mr. Crumpacker is reshaping the popular "Boo-rito" promotion that Chipotle has been running for years. Customers who come to the store dressed up as a burrito -- think college students wrapping themselves in foil -- are rewarded with a free burrito on Halloween. It has been a pricey endeavor, however. Mr. Crumpacker said it cost the chain upward of $3.5 million last year. "It cost us a fortune. And it wasn't doing a whole heck of a lot for me from a marketing perspective," he said. This Halloween, the Boo-rito promotion will be tweaked to focus on the horrors of processed foods. Customers who dress up as a processed food will be rewarded with a $2 burrito, with revenue going to Jamie Oliver's Food Revolution effort. "I honestly don't know whether it will work or not. ... But this year it delivers something for us; it says something about Chipotle."

Why Chipotle Ditched Ad Agencies

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