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Behind Coca-Cola’s new agency and marketing approach

Behind Coca-Cola’s new agency and marketing approach
Written by publishing team

Coca-Cola reported global ad spending of $2.78 billion in 2020, down sharply from pre-pandemic spending of $4.25 billion in 2019. But the company has revealed a significant rebound this year, with global ad spending jumping to $2.04 billion. in the first half of 2021 from $1.27 billion in the first half of 2020. Coca-Cola ranks 17th among the world’s largest advertisers, according to the Ad Age data center.

While the victor will come out with one of the biggest account takeovers of the year, it won’t be the winner take it all. Coca-Cola expects to create a list of preferred dealerships separately that will include stores not owned by the winning holding company. This group will be divided into six to eight niche categories — such as experiential marketing, digital marketing, marketing and design for shoppers — with approximately 10 to 20 agencies in each group that can offer or allocate business across the entire Coca-Cola geographical scope.

“We are very clear that ideas can’t just come from anywhere in the world, they have to come,” Arroyo says, noting that this group could include boutique stores or even the self-employed. Wieden + Kennedy, who has handled high profile Coke campaigns over the years, is confirmed to be a part of this group, as is Stagwell-owned Anomaly, which is currently the lead agency for the Coke brand in the United States.

Other established companies include UM, an agency owned by the Interpublic Group of Cos. Which has owned Coke’s media account in North America since 2015. WPP’s MediaCom, Publicis Group’s Starcom, and Dentsu’s Carat also handle various parts of the company’s media accounts around the world. IPG’s McCann has also dealt with important global innovations in recent years.

As for the reason for the Coke cut Accenture, Arroyo noted that it was because the consulting firm did not have the global reach that Coca-Cola was seeking. “I think they’re a great, great agency from an ability standpoint,” he says. “The challenge we faced was more than geographic range. Their level of ability varies greatly depending on geography around the world.”

It is estimated that the winning holding company would get about two-thirds of Coca-Cola’s marketing work, with the remaining third divided among the preferred listing agencies, which Arroyo referred to as an “open source” model. He declined to go into details about the payment model, including whether existing shops would pay their employees.

The company will also name what it describes as a “complementary” media agency to fill in geographic gaps that the leading holding company cannot handle.

The process shows that despite the attempts of holding companies to portray themselves as comprehensive global solutions, companies like Coca-Cola — which operate in nearly every corner of the world — still feel the need to spread their bets.

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However, the Coca-Cola review represents a major consolidation of agencies that is expected to result in significant savings in agency fees. When the company began auditing nearly ten months ago, it worked with nearly 4,000 agencies globally, including those dealing with creative, productivity, shopper and experiential marketing. Research consultants remain on the field with MediaSense for media and PwC for creativity.

Brand Cut

The review comes amid major internal changes at Coca-Cola, which last year streamlined its brand lineup, cutting products like Odwalla juice and Zico coconut water to focus on offerings it believes can expand worldwide. sold 400 brands at once; Now she has about 200.

As it dilutes its products, Coke has attempted to make marketing more efficient, using a so-called “network model” in which creative briefs are channeled globally with input from individual market leaders who adjust the work where appropriate to ensure it works on a country-by-country basis. . It’s a major shift in the company’s strategy that has used a more isolated approach as executives in countries like the United States release their own campaigns without much global input.

Arroyo says he wants his affiliate marketers on multiple continents to “work together through collaboration.”

“It’s not really about the US, Europe or China anymore, or two people in Atlanta deciding all the creativity,” he says. Arroyo, who goes by the name “Manolo,” took over as chief marketing officer in late 2019 and was previously president of the Asia Pacific Operating Group. He works in Singapore – a departure from the senior marketing managers who recently worked out of the company’s headquarters in Atlanta.

“real magic”

One of the first big tests of the new approach will come with a new campaign platform for Coke brand called “Real Magic”. The effort, which is expected to begin next week, will target Generation Z consumers with a heavy focus on gaming, music and sports, while promoting cola consumption during meals and breaks. The concept was developed in-house, but Coca-Cola is using a group of agencies to bring it to life. A Coke representative confirmed that Havas-owned BETC is behind one ad that is expected to debut soon, while WPP’s MediaCom handled the media purchase. He is also involved with Wieden + Kennedy London and Known Unkown, a design firm run by James Somerville, former Global Vice President of Design for Coca-Cola.

The goal is to expand the soft drink user base amid an environment in which young consumers are drawn to a range of alternatives, including smaller brands.

“In the last 20 years, we’ve done a great job maintaining and growing our business in our existing consumer base, but we haven’t been able to hire a lot of brand drinkers,” Arroyo says.

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