Dive Brief:
- Chipotle Mexican Grill says it spends its marketing budget on digital and in-store advertising, but not on higher cost TV ads in order to afford higher quality ingredients in its restaurants.
- Chief Creative and Development Officer Mark Crumpacker said in a conference call the restaurant chain “deliberately” spends less on marketing in favor of ingredients.
- Another reason Chipotle doesn’t run TV ads is because they don’t really fit the company’s marketing vision of storytelling around its ingredients and where they come from.
Dive Insight:
In the conference call Crumpacker was asked why the chain isn’t ramping up marketing spending since it is flush with cash and in-restaurant traffic is slowing. He responded that the focus on quality ingredients is a benefit for customers and that Chipotle has increased its focus on digital marketing, and also will be using in-store assets, such as packaging, to communicate its marketing messages.
Crumpacker said, "The problem with television, beyond the expense, is that it is really, really tailored toward 30-second spots, which really only deliver if you have some sort of a promotional or call-to-action message in them, which is a very slippery slope. We're going to stay the course on telling this brand story."
Chipotle’s third quarter earnings were a disappointment for investors with company expecting low-to-mid single-digit comparable sales growth this year, and low-single-digit comparable sales growth in 2016.