Starbucks Corporation (NASDAQ:SBUX) rarely runs TV commercials hawking the store, except during holiday seasons, but when it does promote, it highlights the fair trade, environmentally friendly coffee beans that are used in single-cup machines and sold in stores. Like Taco Bell, though, Starbucks’ size doesn’t lead to the huge percentage point shifts in sales figures like Chipotle Mexican Grill, Inc. (NYSE:CMG), but Starbucks does show that you don’t need a big expensive advertising budget to show off to customers.
The wrap-up
The future of online advertising looks bright, reading Facebook Inc (NASDAQ:FB)’s second earnings reports that sent the stock close to its IPO launch price for the first time since it went public. Advertising sales globally increased to $1.6 billion from over 1 million companies, mostly local stores in given areas, roughly $1,600 per company, or less than $140 per month. Of that, $721 million comes from the US and Canada, which may be a flatter region than Asia, which grew at a faster pace, but it highlights how much profit can be made by reaching out to customers through social media, and for a small price compared to TV airtime even in local markets. With 41% of advertising sales coming from mobile advertising, the need to get to customers’ phones is important.
For Chipotle Mexican Grill, Inc. (NYSE:CMG), Facebook Inc (NASDAQ:FB) and Twitter have been the crux of the company’s advertising strategy. As long as Facebook and Twitter users still chime in regularly, it will help any company wishing to cash in do so, which bodes well for the rise of organic, socially conscious eating establishments like Chipotle and Starbucks Corporation (NASDAQ:SBUX) that have been growing in popularity recently.
By cutting advertising costs by switching to social media, it allows for the 23% increases in sales that smaller businesses need to stay competitive, and keeping costs down helps profit margins out. Expect bigger competitors like Taco Bell to boost its social media presence as well, since TV is becoming an outdated advertising method, as well as an expensive one. Chipotle Mexican Grill, Inc. (NYSE:CMG) has been a success in this field, and they are clearly a trend setter in this operation.
The article Chipotle’s an #AdGenius originally appeared on Fool.com and is written by John McKenna.
John McKenna has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican (NYSE:CMG) Grill, Facebook, and Starbucks. The Motley Fool owns shares of Chipotle Mexican Grill, Facebook, and Starbucks. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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