CLOSE-UP: Live Issue - Coke and Pepsi face off in next round of cola wars

Coca-Cola's subtle ad looks a better bet than Pepsi's epic film, Claire Billings reports.

The latest episode in the so-called cola wars has just kicked off as long-time rivals Coca-Cola and Pepsi launch remarkably distinct, yet equally high-profile, advertising campaigns.

The market is being squeezed by health warnings and the rise in popularity of bottled water and designer coffees, so the need for the two rival brands to turn on each other is more acute than ever.

The first campaign to break was Mother's debut work for Classic Coke (it took the branding brief from McCann-Erickson last year). It's a straightforward TV campaign, starring Sharlene Hector, a virtually unknown nightclub singer from London.

The spot shows her walking along a street singing Nina Simone's I Wish, while handing out bottles of Coke to strangers.

By contrast, Pepsi's ad is a big-budget, three-minute film featuring the high-profile pop stars Beyonce Knowles, Britney Spears and Pink as scantily clad gladiators about to battle it out for the entertainment of the evil emperor, played by Enrique Iglesias.

The no-expense-spared spot shows the gladiators defiantly standing in the middle of the arena belting out Queen's anthem We Will Rock You while a bemused Iglesias looks on.

The ad ends with the line: "Dare to drink."

While Coke's ad discreetly crept on to our TV screens, Pepsi's launched with a movie-style premiere in London on 26 January and a one-off showing that night of the full-length version during The Osbournes on MTV.

It rolled out on Monday and will appear on TV screens around the world, except in the US, throughout February.

It's part of the brand's broader strategy to use celebrities, usually pop stars and footballers, to create excitement about the brand and as a hook to encourage consumers to take part in in-store and on-pack activities.

The current ad aims to drive home the message that consumers should "dare to get the most out of life", according to a Pepsi spokesman.

Martin Hemmel, the international board account director at Abbott Mead Vickers BBDO, which created the film, describes the gladiator spot as a "celebration between Pepsi and music to a defined target audience".

"It brings together three relatively disparate divas who perform a definitive rock anthem and create magic in a three-minute execution," he says.

The execution is being billed as the "Pepsi music campaign" and aims to convey the message that Pepsi is making celebrities in the music and sports arenas accessible to consumers, according to Mike Mulholland, the business director on Pepsi at MindShare.

"The campaign runs across a broad base of channels targeting young adults," he says. "It's about tapping into the affinity consumers have with the stars."

It is a very different approach from that of its larger rival, Coke, which is shying away from celebrities, plucking Hector from obscurity to promote some caring and sharing brand values.

Andy Medd, a managing partner at Mother, said: "Coke has a set of brand values. It is upfront and setting an example. It cares about doing the right thing. In the real world of Coca-Cola, people would help each other."

The ad strikes at the heart of the English psyche as the English, particularly Londoners, are often criticised for being unfriendly and too caught up in their own lives to give someone they don't know a smile, let alone a drink.

"It's a simple message, cherishing what's important in real life. It was developed with the British consumer in mind," Julia Goldin, the Coca-Cola GB marketing director, says. "It's meant to make people smile."

The simplicity of the spot means that it will talk to all age groups.

It also manages to get under the skin of the UK public, a strategy that has always been Coke's strength, Dr Richard Halpern, a strategic marketing consultant and former consultant to Coke, says.

"What people forget is that the success of most brands is at grass-roots level. That's been the success of Coke," he states. He believes it was Coke's decision to get to know individual markets and accept the differences between them. It then uses this knowledge to market to them. "Many people didn't want to acknowledge it but Coke said 'we understand you and you're not the same'," he explains.

Both brands clearly believe that music is a sure way to engage a young audience. Coke backs its ad with sponsorship of the music charts and its mycokemusic.com website.

However, they have always executed their communications in very different manners. In the past, Pepsi's promotions have ranged from the Pepsi Challenge in the 80s to its Pepsi Blue drive in the mid-90s, involving an electric blue Concorde and an edition of The Mirror printed on blue paper.

Meanwhile, Coke's activity has evolved very subtly. Its endline, following breathtaking amounts spent on global market research, has changed from "always" to "enjoy" to "real". The warmth of Mother's new spot is reminiscent of Coke's iconic 70s execution based around the song I'd Like to Teach the World to Sing.

Now both brands are facing massive challenges to growth. In the UK, the furore surrounding the rising number of obese children has led Coke to pledge not to advertise its brands to the under-12s. However, advertising ban or not, Coke and Pepsi can expect to face an increasingly health-conscious market disinclined to consume the "empty" calories in a non-diet cola drink.

The UK cola market was worth $4 billion in 2002. John Band, a Datamonitor consumer analyst, believes the market has stagnated after the boom in the 90s, when the diet variants were introduced. "Sales of variants of diet colas and sugared colas are pretty much equal now," he says. But the arrival of the new vanilla and lemon variants in 2002 does not appear to have reinvigorated sales.

Own-label colas from supermarkets such as Tesco and Sainsbury's, as well as the rise in popularity of bottled water, flavoured water and iced tea and coffee, have all put pressure on the market leaders.

Coke still leads the sector with 25 per cent of the UK cola market, compared with Pepsi's 11 per cent, and with competition rising, the only place they will be able steal market share is from each other.

The wholesomeness of the latest offering from Coke is likely to win the hearts of the public and looks as if it will enable the brand to maintain its lead. Pepsi's commercial, with the feel and appeal of a Hollywood blockbuster, may impress in the short term, but fails to communicate a clear long-term positioning.

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