Coca-Cola has launched a review of its U.S. media agency account, the beverage and snack food giant confirmed Wednesday. MediaVest has been the incumbent for more than a decade. The client has not conducted a formal review of its U.S. media planning and buying during that time.
MediaVest will defend against a limited field that includes MediaCom, Carat and UM, which all have pieces of Coca-Cola in different parts of the world.
The client spent a little more than $400 million on ads in the U.S. last year, according to Kantar.
The review comes at a challenging time for the global beverage marketer, which has suffered sales and profit declines in the last couple of years. Today, the company reported its first quarterly sales gain (1%) in two years. It was achieved by price hikes that were implemented to offset sluggish demand, amid consumer worries about the impact of soft drinks and snack foods on obesity and other health-related issues.
Overall, the company spent about 6% more on marketing in 2014 than in the previous year, and the company is expected to spend more this year.
Of the Q1 results, issued today, Muhtar Kent, Coke’s Chairman and CEO said: "We are pleased with our solid progress on the implementation and execution of our global strategic initiatives,” which include an increase in marketing but cost-cutting in other areas.
“Though we are still in the early stages, we see some initial positive indicators that we have the right strategies in place to accelerate growth. However, we continue to view 2015 as a transition year as the benefits from the announced initiatives will take time to fully materialize amidst an uncertain and volatile macroeconomic environment,” he added.
As to the review, a Coca-Cola spokesperson said: “We have a very productive and strong relationship with Starcom Mediavest Group that has served both companies very well for the last 11 years. Over this period, SMG has continually improved and strengthened its offering and remains a valued partner… As the media marketplace reshapes and reinvents itself, we frequently take the opportunity to formally review our media partners all around the world. Continued appraisal of our partners ensures we are both working with, and acting as, the best partners to create the most value at the right price.”