Coke To Focus On Events, Loses Faith In 30-Second Spot

Coke-Bottles

Coca-Cola looks to focus its TV ad spending on so-called DVR-proof events, while buttressing them with 360-degree campaigns.

With ad-skipping rampant, the company has lost faith in the effectiveness of traditional ads in comedies and dramas, save for the Super Bowl, “American Idol” and other programming that consumers watch live and talk about the next day around the Coke machine.

“The 30-second spots on television (are) no longer the way to do it,” said CFO Gary Fayard at an industry event. “You still do 30-second spots, but if you’re like me, most of the television you watch, you record and when you then watch it, you skip over all the ads … (but) you will watch certain shows live because you want to be able to talk about them tomorrow when you go to work.”

Still, even as advertising is concentrated in live-oriented events and sports, Coke is planning a major Olympics initiative this summer -- a traditional spot can no longer stand alone, Fayard said. Links and integrated campaigns will use social and digital media -– as Coke did with Super Bowl ads this year -- and opportunities for consumers to take some ownership of brands and pass along endorsements is crucial.

“A ‘like’ is not good enough -- you want a ‘share,’” Fayard said, “because consumers today believe … they own our brands. They are the ones that talk to each other … about which brands live up to their promise and which ones don’t, so having that integrated campaign across all the different platforms is critically important.”

Coke plans to continue to ramp up its investment in marketing as it sees positive results and continues with its 2020 vision, hoping to usher in a massive revenue increase by the turn of the next decade. Coke has spent $11 billion globally in marketing over the past two years, with an additional $6 billion or so coming from its 275 bottling partners.

“Our brand health scores are the healthiest we’ve seen in decades, and they continue to improve across the board,” Fayard said.

Coke will also sponsor the European championship soccer tournament this summer along with the Olympics.

Speaking more broadly about Coke’s future, Fayard said projections that 1 billion more people will enter the middle class globally over the next eight years -- with a similar number moving to cities from rural areas -- should prove a boon for the non-alcoholic beverage industry and, by extension, packaged goods businesses.

“No matter how bad the financial crisis has been,” he said, “wealth is still being created and will be created over the next eight years.”

Coke has 15 brands generating $1 billion a year or more in revenue.

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9 comments about "Coke To Focus On Events, Loses Faith In 30-Second Spot".
  1. Darrin Stephens from McMann & Tate , March 23, 2012 at 8:36 a.m.
    Ya know, Pepsi cut back on 30 second spots a couple years ago and lost market share to Coke. I guess Coke didn't learn from its arch-rival's mistake.-------- And what a hoot, the CFO of a multi-billion dollar company thinks people watch tv the same way he does.
  2. Anthony Green from Optimal , March 23, 2012 at 9:13 a.m.
    Perhaps Pepsi were ahead of their time in this regard. Acknowledgement that the landscape has shifted and old ways of thinking need not apply - great to see
  3. Douglas Ferguson from College of Charleston , March 23, 2012 at 9:39 a.m.
    Tell Larry and Darrin that it's not 1966. It's not just the CFO who is skipping over the spots in shows.
  4. dan beeman from sponsorship insights group , March 23, 2012 at 11:40 a.m.
    As a leading sponsorship professional, I love hearing this! Interactions have much more impact than impressions. We are currently discussing this topic in our group on LinkedIN: http://www.linkedin.com/e/gis/59380
  5. Darrin Stephens from McMann & Tate , March 23, 2012 at 11:44 a.m.
    If the CFO would look at some data, he would see that most TV viewing is not DVRed and about half the DVRed spots get watched.
  6. John Grono from GAP Research , March 23, 2012 at 7:40 p.m.
    Darrin 1, Douglas 0.
  7. Jeffery Beliveau from PFC , March 26, 2012 at 9:45 a.m.
    @John Grono LOL! And I concur :) I too found the "...if you're like me..." line to be a bit of a Prof. Farnsworth moment.
  8. Chuck Nyren from Advertising to Baby Boomers , March 26, 2012 at 3:42 p.m.
    What Darrin Stephens says.
  9. Eric Mitchell from Hearst Television , March 27, 2012 at 10:10 a.m.
    Darrin is right. The local bottlers are NOT real happy with the direction Indra Nooyi has taken the company. I'm betting we see a lot more shake up at the top for PepsiCo. What Gary Fayard needs to understand is that the power of the Coke brand was built and maintained on television and television still remains the top media used on a daily basis across all demographics. Winston cigarettes found out in 1971 what happens when TV isn't the focal point of your ad campaign...and because TV viewing is up over the last 10 years, it should still be the main focus of any large brand campaign.