Does “Free!” Work? An Analysis of the Starbucks Free Pastry Campaign
By Michelle Greer, July 28th, 2009
With Chris Anderson’s new book “Free!” coming out soon, there is a lot of talk as to how well giving something for free works as a marketing device.
Starbucks recently gave away free pastries with a drink order to customers coming in before 10:30 a.m. on July 21st. We used the Community Insights product to track when the words “Starbucks”, “free” and “pastry” were mentioned within any blog post, a tweet, or online news post to measure the overall buzz.
This graph shows the coverage blogs. As you can see, 420 blogs covered the story, a 556 percent increase from July 19th to July 21st.
The chatter on Twitter increased at a much more rapid rate. Starbucks received a 2000 percent increase in tweets the day of the promotion and actually arose as a Twitter trend.
One might not think that a free pastry is exactly big news given the current health care debate, but the story did get picked up by major online news outlets. 75 major news publications wrote about the story across the web.
The vast majority of reports of the story were portrayed in either a positive or neutral tone. Only 6.3 percent of the stories were negative.
Was the buzz and extra business worth the cost of all those pastries? Factors to consider are:
1.) How many people came into Starbucks and bought $4 lattes in order to get a free pastry who would not have otherwise.
2.) How many people would have walked into Starbucks and gladly paid for both, but instead received the free pastry.
3.) The worth of 420 mentions in blogs and 75 from news outlets.
4.) The worth of getting so many tweets that #Starbucks was actually a Twitter trend.
5.)Starbucks surpassed Coca-Cola as the company with the most Facebook fans after this campaign. They can now send targeted updates to 3.7 million people around the world. How much are the increase in fans as well as the bragging rights worth?
Before the dawn of social media, could a company like Starbucks get the word out about free pastries enough to justify the lost profits? How are tools like Facebook and Twitter changing the game by reducing advertising costs? Giving away free tangible goods is an adventurous move, but the incredible amount of buzz this campaign generated made it worth it in the end.
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Tags: Biz360, chris anderson free, Community Insights, economics free marketing, free marketing analysis, freemium marketing, market insights, social media free marketing
