Gen-Z Opps: Starbucks shifts strategy to reach younger audiences

Sales Lead: In an effort to bolster brand awareness and engagement among Gen-Z, Starbucks is shifting from focusing on hot drinks to cold ones.

• Younger audiences often have more discretionary money to spend, so Gen-Z is becoming more and more of a priority to this company.
• The company will likely:
  • Return to heavier ad spend, especially via digital channels
  • Seek new digital and/or social agency partners
• Target demographic: 
  • Gen-Z

Additional spending insights:

• Broadcast insights (TV ad creative spend, effectiveness, impressions, and performance)
  • YTD spend: Starbucks has allocated roughly $36.9m toward national TV commercials.
  • Last year: The company allocated around $52m toward this channel last year after having spent 17% less, around $43.1m, in 2020.
  • 2022 ad programming: Starbucks's 2022 commercials have targeted millennials watching shows such as NFL Football, Good Morning America, Today, The Tonight Show Starring Jimmy Fallon, and Friends.
• Digital and social insights (digital ad spend, effectiveness, impressions, and performance)
  • YTD spend: So far this year, the company has spent approximately $45.2m on digital ads.
  • YTD data: Starbucks has earned ~5.3b digital impressions YTD via Instagram (55%), Facebook (26%), desktop video (17%), and Twitter (2%) ads.
  • Last year: In 2021, the company's estimated full-year spend decreased 4% to $82.9m from that of $86.3m in 2020.
• Additional channel insights  
  • The company utilizes OOH, print (magazines), podcasts, and local broadcast.​​​​​​​​​​​​​​
  • It also works with influencers such as Barack Obama.
  • Finally, Starbucks invests in cause marketing initiatives such as the Global Month of Good effort featured in the video above.

Additional agency insights:

• Opportunity: Starbucks may need additional digital and/or social media management assistance to more effectively reach Gen-Z.
• Current agency roster:
  • Spark Foundry​​​​​​​: Media AOR
  • Energy BBDO: Creative AOR
  • BBDO Worldwide: Creative AOR
  • Edelman: PR AOR

Insight Sources: Broadcast insights estimated by iSpot; digital spend insights estimated by Pathmatics; additional channel insights estimated by Kantar.