Starbucks & MSNBC: How Much is Official Worth?
Yesterday, MSNBC and Starbucks announced that Starbucks would continue to star in their "Morning Joe" morning segments - only this time MSNBC will be getting paid as part of a $10 million sponsorship deal between the two companies. For many months, folks have speculated about how much Starbucks was paying for the placement, but the show's host, Joe Scarborough, insisted that up until now the starbucks cups were "organic." In fact during the yesterday's announcement, Starbucks CEO Howard Schultz said "People have asked us for years, Howard, how much does Starbucks pay you to drink your coffee, the product placement is wonderful."
The success of the deal will likely be in how deep it is integrated into MSNBC's various media channels. If MSNBC integrates the deal throughout its various new media assets like mobile and online, the deal could prove much more valuable, than the voice-overs and naming rights alone that were discussed in yesterday's announcement - especially if it finds ways to use this media to demonstrate the Starbucks "experience" in addition to the product. Straight product placements are a thing of the past and simple brand awareness is not the issue for Starbucks.
However, if Starbucks was already organically used in the show, one would have to wonder what the impetus was for Starbucks to pony up $10 million for a slightly broader "official" deal. What is more important to one of the world's most powerful brands - the incremental brand awareness of voice-overs or the validity that on-set product usage was already demonstrating (to great success it seems). The answer may have a lot more to do with the competitive landscape than the deal structure. McDonald's recently launched a new $100 million marketing campaign focused on their McCafe coffee offering and Dunkin Donuts recently cut their latte prices by 15% in an effort to gain share. Was the sponsorship a defensive move spurred on by other bidders, an instance of MSNBC looking to get comp'd for previously unpaid impressions or a simple case of Starbucks looking to expand its integration with the show to show not just the product, but the experience?
Probably some combination of the three.
In any case, when news programs (seemingly the most resistant to paid integration) start getting in-show sponsors, you know it's all on the table. This is the future and the flood gates of new opps are opening - which will make all of our jobs more exciting and challenging at the same time. With that said, I wouldn't want to be seated between sales and production at the next MSNBC staff meeting.