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Starbucks tries to Tweet for profits

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I have ridiculed Starbucks (NASDAQ: SBUX) in the past, but I actually have to give them some props for trying something new. Of course, this newest move is a double-edged sword, but we'll deal with that in a moment.

According to The New York Times, SBUX will display new advertising posters in six major cities and will try "to harness the power of online social networking sites by challenging people to hunt for the posters on Tuesday and be the first to post a photo of one using Twitter."

The advertising campaign started earlier this month in newspapers and magazines and is described by the company as "the biggest marketing effort it has undertaken." This campaign is in response to a major ad campaign by SBUX competitor McDonald's (NYSE: MCD), which is promoting its McCafe coffee drinks.

Terry Davenport, chief marketing officer at SBUX, says that its competition "is trying to just commoditize coffee and take it down to a level where all coffee's the same, and if coffee's coffee, you might as well buy the cheap stuff." Is it just me or does this sound like a cheap shot at MCD customers wrapped in a rather elitist statement?

Using Twitter is a good idea. It is a social-networking site that has quite a bit of power -- it is a good move to try and harness that power. Furthermore, Twitter could help SBUX grab a younger demographic of coffee drinkers. Using the site could help the company boost its sales, but as the article notes, "a follower on Twitter does not necessarily translate to a daily Frappuccino drinker." This is an excellent point, because the true advertising and marketing value of Twitter is unknown.

On to the double-edged sword part of the campaign. I decided to take a jaunt over to SBUX's Twitter page, which contains a decent amount of customer complaints. I am afraid that the company could find itself putting out fires started on Twitter, as this outlet puts the consumer in direct contact with the company.

I'm not sure that this is the best idea for any company, let alone one that charges upwards of $5 for a drink that can be purchased elsewhere for far less. We'll see how this works; I hope for SBUX sake that it is a good move.

Something else for the company to worry about: Maybe this aggressive style of advertising will actually put off potential new coffee drinkers.

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Last updated: November 25, 2009: 05:00 AM

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