I arrange for BrandIndex to own the "Coffee Wars" for both Ad Age and Brandweek

All That Advertising Brings Buzz for Coffee Marketers

BrandIndex: Consumers Saying More Positive Things About Starbucks, McDonald's, Dunkin'

CHICAGO (AdAge.com) -- The coffee wars generated a flurry of advertising in May. McDonald's launched its first McCafe blitz, Dunkin' Donuts made its first concerted doughnut push in more than a decade and Starbucks began its first pure branding campaign. While it's too soon to say what the impact on sales has been, all three marketers saw a major uptick in buzz, as measured by BrandIndex.

BrandIndex, which tracks more than 1,000 brands by conducting 2,000 daily interviews from a panel of 200,000 consumers, monitors key brand attributes, including buzz, value perception, quality ratings and customer satisfaction to compile its index (which has a range of -100 to 100).

Dunkin' began May with a 24, peaked at 33 mid-month and settled at about 32 this week. McDonald's started with a 15, peaked around 24 and had dropped off to 16 by June 9. Starbucks' campaign, which has been confined to newspapers and select outdoor markets in its initial phases, has been more cyclical. The company began May with a score of 1, shot up to 11 within a week and plummeted again. In the past week, the chain's buzz has shot up to double digits again.

Those numbers may seem low, but ratings vary dramatically by category. Within the fast-food sector, a good buzz rating is considered to be anything above 10. Ratings closer to zero mean consumers have heard an even number of positive and negative things about a brand.

"Over the last few weeks, Starbucks has generated buzz through a variety of channels, including our national 'Coffee value and values' campaign hitting its stride, beginning our sponsorship with 'Morning Joe' on MSNBC and being named No. 1 best coffee by the Zagat survey," Starbucks' senior VP-marketing, Terry Davenport, said in a statement. He added that the retailer's online activity, including using Facebook and Twitter to tout its efforts, has also built excitement among baristas in its stores.

Dunkin' did not immediately respond to a request for comment.

McDonald's spokeswoman Danya Proud said the burger chain has been "extremely pleased" with the results of its coffee push. In particular, she said, the chain's "McCafé Your Day" online competition with Visa has gotten more than 10,000 entries. That response rate makes it "by far the most successful online sweepstakes in the company's history," Ms. Proud said.

Starbucks tries 'a different tack'
But all three companies got a pretty strong jump in buzz, said Ted Marzilli, global managing director at BrandIndex. Starbucks' jump, he said, had the "highest magnitude," especially because it was coming from about zero. He said Starbucks should be heartened that it not only made a splash when its competitors were outspending it but got a second spike in interest as McDonald's and Dunkin' were leveling off.

"They're probably going to be outgunned by McDonald's and Dunkin'," he said, noting that those brands spend more on advertising. "Starbucks is trying a different tack in

last couple of months, getting people to think about bigger concepts. How expensive is a $3 latte when you think about other things like providing health care, working with farmers in areas where coffee is imported? That slightly different tack seems to be making a mark."

Mr. Marzilli said an increase in buzz can trigger shifts in other metrics, but not always. And as it stands, Starbucks is still struggling with its "value" perception, or whether consumers view the brand as giving them the most bang for their bucks. The chain has been hovering around -26, with a small spike last week that seems to have already corrected. McDonald's is just behind Dunkin' in value perception, around 25 to Dunkin's 26.

But when consumers want to treat themselves, all these numbers may

go out the window. According to BrandIndex, 43% of adults asked where they were most likely to purchase a "premium coffee drink" said Starbucks, 15% picked McDonald's, 11% sided with Dunkin' and 31% had no preference.

Starbucks Brews a Fresh Pot of Publicity

June 10, 2009

-By Elaine Wong

Faced with consumers cutting back on purchases and stiff competition from McDonald’s McCafe, Starbucks today (Wednesday) launched an ad campaign touting its newly earned accolade in Zagat’s 2009 Fast Food survey: “No. 1 Best Coffee.”

Zagat released the results of its 2009 Fast Food Survey on Monday. Starbucks won for best coffee in the “fast food” segment. The campaign, via BBDO, New York, to promote the win breaks in major newspapers including The New York Times, The Wall Street Journal and USA Today. In less than 48 hours, Starbucks said it has been able to “pull the lever” on several marketing components­from newspaper ads to digital, paid search and social median an effort to generate buzz for the brand.

The goal was to implement a marketing campaign that would effectively link both offline and online components, including paid search, digital ads and e-mail mailings to registered Starbucks cardholders. Starbucks also bought “smart-targeted placements” on web sites like Yelp.com, where users share ratings on categories including shopping, dining and arts and entertainment.

The social media component involves Starbucks reaching out to its Twitter community of 200,000 members, as well as Facebook, where the brand has 1.8 million fans, and MyStarbucksIdeas.com (a community of 180,000 registered members).

Starbucks could use the publicity. Data from YouGov’s BrandIndex­ which tracks consumer perception of more than 1,100 brands on a daily basis ­showed that Starbucks lags behind Dunkin’ Donuts and McDonald’s in terms of perceived value. Though the gap narrowed toward the end of May, McDonald’s ongoing push for the McCafe has widened the distance between the two brands, BrandIndex found.

The new effort tries to change brand perception by linking customer appreciation with the quality of Starbucks coffee. “Zagat says we’re the country’s #1 best coffee. Actually you said it, but Zagat repeated it (which is nice),” the ads state.

Chris Bruzzo, Starbucks’ vp of brand, online and content, said the campaign reflects the chain's agility. “It’s actually a pretty well-oiled machine here, because we have great, ongoing conversations with our consumers,” he said. “That’s a daily conversation that’s going on and it makes us really nimble, flexible and enables us to do great things very quickly.”

The campaign will continue into July, and in September, Starbucks will also incorporate in-store signage, Bruzzo said.

The move follows Starbuck’s recent streak of aggressive media promotions. Close to Election Day, it ran a spot, also via BBDO, New York, which posed a series of questions, such as: “What if we all cared enough to vote? Not just 54% of us, but 100% of us.” More recently, it’s began a push for its Via line of instant coffee and last week, Starbucks scored a sponsorship deal with MSNBC’s Morning Joe.

All the buzz could be helping the chain already. Among adults ages 18 and over, Starbucks' buzz score jumped from -2.2 on June 1 to 27.2 yesterday (Tuesday). Dunkin' Donuts ended the day with 24.5 and McDonald's was at 15.6.