Avid Picks: Chipotle’s $50M Marketing Push & Marketer Confidence Weighs on Rio Olympics Spending

Chipotle readies for ‘unprecedented’ marketing push after food safety crisis

Summary
The Centers for Disease Control and Prevention announced last Monday that it has wrapped up its probe of Chipotle’s E. coli outbreaks, declaring them to be over with no new illnesses reported to the agency since December.

The news was welcome by the Denver-based fast-casual chain whose business sales for 2015 were down more than ever before and is now preparing to make an unprecedented marketing push to bring back customers.

Starting in mid- February, Chipotle will launch a marketing campaign to get customers to return to its restaurants. Marketing (both direct marketing and social media marketing, including a new video-type game) will focus on value and quality with no mention of foodborne illness or safety.

Chipotle’s stock lost nearly half its value after an E. coli outbreak first surfaced in the Pacific Northwest. The scandal has led the chain to implement new food safety protocols including increased store audits and DNA testing.

“This has been a really difficult time for us,” founder, chairman and co-CEO Steve Ells said. “I have confidence we are going to be able to recover from this.”

Our Take

This year will be all about food safety for Chipotle. The company is experiencing one of their most challenging times in their history as it deals with the aftermath of its food safety issues. But the burrito giant remains optimistic and plans to bounce back within the first quarter of 2016.

Chipotle expects to spend at least $50 million in the first quarter of 2016 trying to win customers back. Public relations messaging and a new website devoted to food safety will focus on Chipotle’s new food safety procedures. Its marketing campaign; the biggest in its history (both direct marketing and social media marketing, including a new video-type game) will focus on value and quality with no mention of foodborne illness or safety.

It will be really important to see how Chipotle restores its image as a fresh, non-GMO restaurant. CEO Steve Ells wrote an apology letter published in 61 newspapers and promised that the chain would be the “safest place to eat” during an appearance on The Today Show last December.

Rio Olympics and Euro 2016 fail to lift advertising confidence

Summary

With exactly six months to go until the opening ceremony of the 2016 Olympics in Brazil’s Rio de Janeiro and more than 3.5 million tickets from 189 territories already requested for the UEFA Euro 2016, the imminent prospect of a business bonanza from both sporting events paints a mixed picture.

Marketers’ confidence in future performance and an economic boost from this sporting events has fallen to its lowest rate in almost three years; companies are worried about cost and the economic outlook in the UK and overseas markets such as China. UK marketers overall have chosen to raise their budgets but only by the smallest amount.

Our Take

The Rio Olympics and Euro 2016 are just around the corner; it is that time for marketers and brands to start looking at their budget for the events but marketers who had increased their budgets for 13 successive quarters have reported a significant fall in confidence.

The U.K’s currency fell to the lowest level in 5 years against the dollar last month; Rio 2016 begins in six months’ time but there are worries about athlete and staff welfare due to the Zika virus which has spread across Brazil. The IPA report, a quarterly gauge of the health and prospects for the ad industry published since 2000, found that marketers’ optimism about their financial prospects had fallen sharply.

Despite all concerns the IPA Bellwether has predicted a good start to the year. But the question still remains; will the major sporting events of the year lift enough confidence for marketers to increase spending for the year?

Avid Picks are articles that caught our attention over the last week.  We provide a summary and our key takeaways.  

Photo Credit: Flickr Some Rights Reserved

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