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Chipotle and the “adless” brand March 11, 2013

Posted by rmshepard in Uncategorized.
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Big business is almost synonymous with advertising. No so at Chipotle. The company spends just about $6 million per year in national advertising, compared to the $650 spent by McDonald’s and the “meager” $100 spent by Arby’s. According to Jim Edwards from Business Insider, Chipotle has adopted more of a form of “word-of-mouth publicity,” and considers advertising a “risk factor” to its business. In an attempt to avoid ad spending, Chipotle has even managed to do quite well, with sales at $2.3 billion in 2012, a 23 percent increase compared to the year before.

Chipotle hasn’t forgone all advertising, though. The company simply regards traditional marketing irrelevant to its brand. While it purchased time for one ad in 2012, the way the ad came to be shows that Chipotle is a different company. The “Back to the Start” ad began in summer 2011 as a two minute online video featuring a farmer struggling with a corporate farm. To the music of Willie Nelson covering a classic Coldplay song, the farmer changes his ways and reverts his property back to the way he began. The ad was a hit, with millions of views on YouTube. In response to the praise over social media, the company eventually purchased a spot for the ad, its very first on national television.

To see the “Back to the Start” ad yourself, watch the following video:

Discussion Questions:

1.  What is “word of mouth” advertising and how does it work?

2.  Why would executives consider a switch to traditional advertising to be irreversible for Chipotle?

3.  How has Chipotle used social media to make the most of advertising?

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