Texas Business Report: Chuck E. Cheese’s Ad Campaign Flops

The chain's parent company's strategy of investing more in a digital media campaign targeting moms seems to have backfired, with profits dropping 33 percent. 
Sat November 3, 2012 1:05 am

The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across Texas this week.

Bad Luck Chuck
Despite getting an  image makeover earlier this year, Chuck E. Cheese is struggling to draw a crowd. The  Dallas Morning News reported this week that Irving-based CEC Entertainment, parent of Chuck E. Cheese’s restaurant chain,  saw profits decline by 33 percent last quarter, down to $7.8 million from $11.7 million in the same period last year. CEC is attributing the slowdown to “a significant reduction in kid’s television advertising” in favor of “a digital media advertising campaign targeting moms.”

The Bottom Line: CEO Michael Magusiak acknowledged in a statement that the shift in the company’s marketing strategy may have backfired: “In retrospect, we believe we reduced media weight levels too deeply, which negatively impacted sales.”

State of Confidence
Texans are pessimistic about the trajectory of the U.S. economy but have a (slightly) rosier outlook for business growth in their home state. In a newly published poll, the University of Texas and the Texas Tribune found that 42 percent of respondents believe the national economy is worse than it was a year ago—“including 23 percent who said the economy is a lot worse off.” Thirty-two percent said the U.S. economy has improved since 2011, and 25 percent said it is about the same.

Turning to Texas, just 21 percent of

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