Social Media Throwdown: Dunkin’ Brands vs. Starbucks

Social Media exposure is imperative to a company’s long-term success. If a company fails to deliver in this area, it will lose market share and suffer a slow death.

Dan Moskowitz
Dan Moskowitz
Jan 13, 2014 at 12:26PM
Consumer Goods

It's not time to make the donuts anymore; it's time to make the coffee. And while some of America runs on Dunkin', almost all of America runs on social media.

Dunkin' Brands Group (NASDAQ:DNKN) is a company that has navigated changing industry trends well, and the social-media boom is no exception. Below we'll take a look at some examples -- two quick videos included -- and we'll see how the company's marketing campaign is likely to fuel brand awareness.

Not that this is Ringling Brothers, but to add to the excitement, we'll take a look at how Dunkin' Brands compares to Starbucks (NASDAQ:SBUX), McDonald's (NYSE:MCD), and Krispy Kreme Doughnuts (NYSE:KKD) from a social-media perspective. The stronger a company's social-media exposure and customer engagement, the more potential it has to increase brand awareness and communicate promotions and loyalty programs going forward. 

Marketing through the vine
Dunkin' Brands was one of the first companies to take advantage of Twitter's Vine service, which features six-second videos. Dunkin' Brands first had a billboard ad on Monday Night Countdown that featured a hot coffee and an iced coffee facing one another, awaiting the coin flip from a zebra-striped latte referee. In addition to spreading brand awareness, the ad was designed to promote #DunkinReplay, which shows Dunkin' Donuts' product-themed replays of a play that happened in the first half of a Monday Night Football game. Here's a quick example:

Ed Erhardt, head of ESPN sales, called the marketing campaign "groundbreaking." That's a nice compliment coming from ESPN. Furthermore, Dunkin' Donuts is in its second year of its Dunkin' Donuts Field Pass, where anyone can ask a question to an analyst on Monday Night Countdown prior to the game. Note: Only the best questions will be answered. A similar approach has been taken with #DDRedCarpet, where thanks to partnerships with Entertainment Tonight and Extra, followers can discuss red-carpet happenings during award season.

Dunkin' Brands also launched #MyDunkin back in October 2013. This should increase customer engagement as it creates TV spots based on customer experiences that are communicated through tweets. Below is an example:

Dunkin' Brands is steadily increasing its social presence, but it's still not best of breed in this category compared to peers.

Coffee and donuts social scene
At the time of this writing, Dunkin' Donuts has 477,470 Twitter followers. That's more than Krispy Kreme Doughnuts, with 86,340 followers, but that should be expected. Dunkin' Brands is a much larger company, with a market cap of $5 billion, whereas Krispy Kreme has a market cap of just $1.3 billion. Dunkin' Brands is much smaller than Starbucks and McDonald's, its prime coffee competitors, which have market caps of $57.4 billion and $95.4 billion, respectively. 

What's interesting here is that McDonald's has 2.1 million followers, whereas Starbucks has 5.5 million followers. Despite McDonald's being nearly twice the size as Starbucks, it has less than half the amount of Twitter followers. In today's social-media world, this is a big positive for Starbucks. It should also be pointed out that McDonald's has tweeted 18,012 times, more than Starbucks at 17,596 times. Therefore, Starbucks' tweets are resonating more with customers.

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A social-media comparison wouldn't be complete without Facebook. Once again, Starbucks is in the lead, with more than 35 million Likes. This is moderately higher than McDonald's, with just shy of 30 million Likes. Dunkin' Donuts has 11 million Likes, and Krispy Kreme has more than 4 million Likes. 

The bottom line
We're now living in a consumer-demand driven economy. If companies don't cater to consumer demands, they will lose market share to their peers. By establishing strong social presences, companies have an opportunity to gather consumer insight information for free. This, in combination with increased customer engagement and communication for promotions and loyalty programs, gives companies with strong social exposure big advantages over their peers.

Dunkin' Brands appears to be where it should be, and recent initiatives demonstrate the company's ability to innovate and change with industry trends. Dunkin' Brands' commitment to growth in the social-media space is positive for the company as well as long-term investors. Social media is only going to grow, and Dunkin' Brands should grow with it, increasing brand exposure along the way. 

However, Starbucks is still the most impressive of the bunch on the social-media scene, giving it at least one edge over its peers going forward. Starbucks has a knack for impressing its customers and investors. There is no reason for this to change. Therefore, you might want to consider an investment. But Foolish investing is for long-term thinkers, and any investments should be preceded by your own research.