Starbucks counts Costa lost PR war

An advertising watchdog ruling has left PR executives at Starbucks frothing at the mouth after it rejected a claim by the coffee giant that an advertising campaign by UK competitor Costa Coffee unfairly boasted that people preferred its coffee over its US rivals.

Costa put out a series of ads and posters featuring headlines such as Starbucks drinkers prefer Costa and 7 out of 10 coffee lovers prefer Costa, which helped to boost sales by nearly 25%.

Starbucks filed a complaint to the Advertising Standards Authority (ASA), claiming that the statements in Costa's ads were flawed as they were based only on taste tests of one type of coffee.

But the ASA ruled that the ads were not misleading, as the supplementary small print was both accurate and large for people to read and understand.

As part of its investigation, the ASA used an expert to scrutinise Costa's survey of 174 coffee drinkers, who blind tasted cappuccino from the high street's three leading coffee chains, and concluded that the sample was sufficiently large enough to be statistically significant.

The ruling is a massive PR coup for Costa Coffee, which has seen sales rocket in recent years, while Starbucks has been faltering.

And Starbucks' decision to put its reputation on the line has backfired spectacularly, as the company has only ended up reinforcing Costa's message that its cappuccinos simply taste better.