Coca-Cola - the world's best-known brand and also one of its most
notoriously changeable marketers - has once again succeeded in
surprising the industry.
In the blink of an eye, WPP's Ogilvy & Mather network was last week
awarded the global Sprite business from Interpublic's Lowe Lintas &
Partners, while Fanta is set simultaneously to leave Soul in the UK and
Cliff Freeman & Partners in the US.
In compensation, IPG has been handed Diet Coke, which returns to Lowe,
the agency that developed the brand's hunk-fuelled Diet Coke spots. The
network's gain comes at the expense of Wieden & Kennedy, which also
loses Powerade to IPG's third major network, FCB. Meanwhile, Lowe's
sister agency, McCann-Erickson Worldwide, is set to regain the parts of
the Coca-Cola Classic business previously parceled out to W&K, Leo
Burnett and D'Arcy Masius Benton & Bowles.
The question now hanging over the UK shops that handle Coca-Cola
business is: "What about us?" These swift network appointments by the
president-chief executive of Coca-Cola's new-business ventures unit,
Steve Heyer, have sounded the death knell for the much-publicised "think
local, act local" approach to marketing introduced by Douglas Daft,
Coca-Cola's chairman and chief executive, who was appointed at the
beginning of 2000.
At the time, Daft's directive was like manna from heaven to frustrated
marketing directors, who for so long were forced to define creativity by
means of a few local tweaks.
In a spirit of creativity triumphing over centralisation, Coca-Cola
became the multinational that swam against the tide and broke away from
other international corporations continuing to move business into global
networks.
It led to sweeping changes in Coca-Cola's advertising arrangements, not
least in the UK. Coca-Cola GB's marketing director, Charlotte Oades,
gleefully started raiding the UK's smaller shops in moves which saw Soul
hop gladly onto the roster with the Fanta account, along with Coke
Auction. Mother cemented the place it had already secured with Lilt by
adding Dr Pepper, the teen juice-drink Alive, Schweppes and, most
recently, Oasis.
So why has the drinks giant done a complete about-turn? Cutting costs is
a likely explanation. The move into local markets came, literally, at a
price - something that was acknowledged at the time by Oades, who
countered: "If you want to build very deep relations with consumers the
only way is to have local insights." Now that the recession has bitten,
a vast roster of local agencies seems expensive. At the same time, the
soft drinks giant is said to see the seamless global network of O&M as
preferable even to that of Lowe Lintas & Partners.
Much has been made previously of Atlanta's "vice-like grip" over its
territories and what chance the "think local, act local" strategy ever
had is debatable - it seems Coke's responsibility to shareholders to act
cost-effectively in such cash-strapped times is behind its latest
decision.
Yet there are grounds for questioning Coke's timing. The terrorist
attacks of 11 September have emphasised the need for sensitivity to
local beliefs and customs around the world. The return to Atlanta's
imperial supremacy over all global marketing risks breeding resentment
against the Coca-Cola culture that the brand epitomises. Osama Bin Laden
once referred to Americans as the enemy, with their "hamburger and
Coca-Cola values". "You'd think the less homogenous, iconic American
stuff it produced at the moment, the better," one insider close to the
business says.
Coca-Cola's UK roster agencies are understandably twitchy about the
ramifications of Atlanta's decision. Many are producing campaigns and
Coke UK says that it is business as usual. "There is no U-turn," Andrew
Coker, the communications director at Coca-Cola GB, says. "Do you have a
crystal ball? I don't. As we speak at the moment, there is no change."
UK agencies claim that the UK marketing department is making reassuring
noises. "They are saying the UK's a different thing and don't worry
about it," a source says.
But while there have as yet been no formal directives from Atlanta
concerning the UK marketing arrangements, all those close to the new
manoeuvres say it is only a matter of time. The question is just how
much local markets know of the grand plan; much as Coca-Cola UK will
doubtless fight tooth and nail for its autonomy, sources close to the
company say it is inevitable that it will have to toe the headquarters'
line. The sheer size of the operation means that it will take some time
for the changes to filter through to the local markets - as one insider
says: "The UK is something like 18th on its list of priorities right
now."
Quite what kind of advertising will emerge from this U-turn strategy is
not yet clear. It's too early to say whether Coke's new initiative will
allow local markets to adapt the centralised work or merely re-run US
ads.
However, insiders predict there will be a different approach. It is said
that Coke is looking for cheaper, non-TV advertising solutions. In this
area, the ability of local shops to compete with the sophistication of
different marketing disciplines offered by integrated networks is
debatable.
The move echoes Unilever, which two years ago unveiled a large-scale
strategy experimenting with different media. "Coke wants to come up with
something beyond the holy grail of advertising," one close source
confirms.
There's no doubt that any directive from Atlanta will be met with a lot
of resistance from the local markets, where positive steps have been
taken to create real local advertising. The decision to decentralise
marketing power was a brave experiment that has hardly had the chance to
reach fruition.
Just how much Coke will lose by sacrificing the local strategy has yet
to be seen. There's no denying that there's been more interesting work
as a result of the decision, with Mother's work for Dr Pepper winning a
Gold at Cannes.
But, at the end of the day, local marketing directors will not risk
conflict with Atlanta. Sources who've worked on the business say that
even Oades, who has devoted so much to building a local dream-team for
Coca-Cola, would not argue. "Once a decision has been made she will
follow it 100 per cent," one said. "That's just how Coca-Cola
works."
- Stuart Elliott, p19.
COCA-COLA: LOCAL VERSUS GLOBAL ADVERTISING
Local: Coca-Cola McCann-Erickson's London agency introduced the "Life
tastes good" endline with a tale of teen elevator romance in April
2001.
Global: Coca-Cola Atlanta revived the brand's links with Father
Christmas for Christmas campaigns through WB Doner in the late 90s.
Local: Diet Coke Developed by Wieden & Kennedy London, recent UK work
has featured Bridget Jones-style singletons on the lookout for love.
Global: Diet Coke The hunky inspiration for female office workers to
take a Diet Coke break was first dreamed up by Lowe.
Local: Dr Pepper Mother's campaign, with the endline, "What's the worst
that could happen?" picked up a Gold at Cannes this year.
Global: Dr Pepper This sugary Titanic spoof, through Young & Rubicam,
picked up a Campaign Turkey of th e Week award in 2000.
Local: Fanta Ads produced through Soul this year used a UK-specific
creative strategy centred on everyday orange objects.
Global: Fanta Cliff Freeman & Partners' global endline, "Share the fun
wherever," cropped up in this 1998 UK ad from Leagas Delaney.
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