Bill Wishon's News and Views

One of the world's best word-of-mouth and customer evangelism success stories, Starbucks is launching its first national advertising campaign. [See the spots here.]

Why advertise? Because store visits are down 1% from same time last year. The stock price is falling. You could say that Starbucks is officially middle-aged. It's no longer the exciting whippersnapper. 

Is that because Starbucks has finally reached a saturation point? Or is it more complicated, the result of a series of decisions that has compromised its roots of authenticity?

I believe it's the latter. To save money, Starbucks has:

• Switched from hand-pulled espresso shots to automatic espresso machines.
• Eliminated the aroma of ground fresh coffee in stores in lieu of "flavor locked packaging."
• Streamlined store designs; today, they lack the customized funky cool of yore.

Starbucks wants to please Wall Street, so it's chasing the P/E carrot by opening stores at breakneck speed. To exploit new revenue sources, Starbucks has:

• Delved into movie producing.
• Launched a record label.
• Started selling shelf space for book promotions.

With this new-revenue recipe, coffee is the appetizer to the big pie of entertainment. Eureka: store visitors are captive audiences. Turn up the Marketing Machine. When you start dreaming of monetizing seats or places in line, you change the nature of what you once delivered.

Will a brand-building TV ad campaign make people visit stores more often? Probably not. Some think the ads might drive people into competitors' stores.

Starbucks is a beloved brand because of the quality of the store experience. Period. End of story. Slurp! It took years for McDonald's to re-learn that.