Starbucks is focusing on marketing as a key driver for its turnaround strategy following a challenging start to fiscal year 2025, with U.S. comparable store sales dropping 4% year-over-year in Q1. CEO Brian Niccol highlighted the company’s shift in strategy, emphasizing how increased marketing investments are expected to stabilize the business and prepare it for future growth.
Reallocating Budgets to Strengthen Brand Positioning
The coffee giant is reallocating resources from discounting to marketing efforts, with plans to “almost double” its marketing spend as a percentage of revenue. Rachel Ruggeri, Starbucks’ executive vice president and CFO, explained this pivot on the earnings call, noting that it is a critical component of the brand’s broader “Back to Starbucks” strategy.
This new focus on broader consumer marketing aims to position Starbucks not just as a coffee provider but as a premium experience, reaching beyond traditional customer segments. The company is moving away from discounts and increasing brand marketing efforts that reflect its premium status.
A New Brand Campaign to Drive Connection
One of the key initiatives under this revamped marketing strategy is a new 30-second advertisement, launched during a linear TV campaign over the weekend. The commercial, set to The Ting Tings’ song “That’s Not My Name,” showcases Starbucks baristas writing names and messages on customers’ cups—a unique element of Starbucks’ customer experience. Niccol emphasized that this campaign is central to shifting consumer perception of the brand, focusing on the distinctiveness of the Starbucks experience rather than just the product itself.
This advertisement marks the first work from Anomaly, a Stagwell-owned agency Starbucks recently hired for its U.S. creative duties. The appointment follows a significant change in Starbucks’ marketing structure, where the company had previously partnered with WPP to create a bespoke Team Starbucks unit.
Strategic Investments for Long-Term Stability
Despite a difficult quarter with flat net revenues, Starbucks remains optimistic. Niccol explained that while the company’s results have “room for improvement,” the disciplined investments made in labor, marketing, technology, and store upgrades will stabilize the business and set the stage for growth moving forward.
The “Back to Starbucks” strategy is focused on reintroducing the brand to consumers, improving customer experiences—particularly during morning hours—reclaiming the identity of Starbucks as “the community coffeehouse,” and enhancing workplace culture.
By putting marketing at the center of its turnaround plan, Starbucks aims to not only recover from recent setbacks but also to carve out a more significant and consistent place in the premium coffee market.