Coca-Cola Co. is undertaking a massive agency review that puts every media and creative account up for grabs across the globe for its roughly 400 brands as the beverage giant looks to significantly reduce its roster.
The review, which is one of the most sigificant of the year, means that Coke creative agencies such as Wieden+Kennedy, Anomaly and McCann must defend their business, as will UM, the Interpublic-owned agency that has held Coke’s North American media account since 2015. WPP’s MediaCom, Publicis Groupe’s Starcom and Dentsu’s Carat also handle various portions of the company’s media accounts around the world. Outside of media, Coke works with roughly 4,000 agencies globally, including those that handle creative, production, shopper marketing and experiential. The company ranks as the world’s 17th-largest ad spender, shelling out $4.2 billion in 2019, according to the Ad Age Datacenter.
Mediasense is the consultant on the media agency review, while Coke tapped PricewaterhouseCoopers to oversee the creative agency review, in addition to what a spokeswoman described as a “marketing efficiency and effectiveness program.” Both reviews will formally begin in the first quarter with the creative portion intended to be wrapped up by the third quarter and the media review ending in January 2022, according to the company.
By trimming its roster and consolidating workloads, the company is expected to significantly reduce its agency fees at a time when its business is under stress from the pandemic with critical beverage-serving venues like sports stadiums and bars and restaurants shut down or operating at limited capacity. But executives are positioning the review as more than a cost-cutting endeavor.
“We believe we can unlock considerable value through a redesign of our model and consolidation of third-party agencies, and while this effort is expected to generate cost savings, this is not the sole objective of this exercise,” Coca-Cola global Chief Marketing Officer Manuel Arroyo stated in an internal memo shared with Ad Age.
The review comes as the beverage giant puts an emphasis on creative and media strategies that can work across the globe, rather than specifically tailored for individual markets. The so-called network model means that increasingly, creative briefs will be led globally with input from individual market leaders that will adjust the work where appropriate to ensure it works on a country-by-country basis. It’s a significant strategy shift for a company that at times has taken a more siloed approach to its marketing with advertising specifically made for key markets such as the U.S.
The new approach comes as Coke trims its product portfolio, axing brands such as Tab, Odwalla juice and Zico coconut water, to focus on bigger bets like Topo Chico Hard Seltzer, Coca-Cola Energy and AHA flavored sparkling water. The idea is to eliminate what CEO James Quincey has described as “zombie brands”—those that might only sell in a single country and add little to the company’s bottom line, in favor of products that can scale around the world.
When it comes to marketing, this means the company is likely to favor agencies that can also scale, or operate across multiple countries. Arroyo in the memo described it as a “complete redesign of our media and creative agency models in an effort to align the strategic, operational, and commercial needs of our new, networked organization.”
He continued: “For some time, we’ve been fragmented in our approach to marketing and media, with models, processes, and partnerships built with local needs in mind. This flexibility has been effective in many ways, but has also created inefficiencies, lack of scale and redundant efforts that do not align with our global strategies, or the rapidly evolving media and creative landscape. Additionally, our reliance on highly localized agency models gives us limited control over the data, measurement, strategies, and technology critical to creating and managing a scalable marketing infrastructure that serves all stakeholders, including our consumers.”
During a recent appearance at Morgan Stanley’s Virtual Global Consumer & Retail Conference, Coke Chief Financial Officer John Murphy said, “underpinning some of the work is a recognition that companies, as they get older, get a little bit fatter. And so, there's an opportunity to be leaner, to be more efficient, to drive out some of the bureaucracy that builds up over time.”
The company is moving to significantly reduce the size of its workforce, earlier this year offering voluntary severance packages 4,000 employees in the U.S. and Canada. It has also trimmed the number of regional business units from 17 to nine. Coke has installed five category leaders overseeing product groupings such as Coke-branded offerings; flavored sparkling beverages such as Sprite and Fanta; water, sports drinks, coffee and tea; dairy and juice brands; and emerging beverages. These executives will get input on global campaigns along with regional CMOs, including Melanie Boulden, who oversees North American marketing.
"Media" - Google News
December 10, 2020 at 01:00AM
https://ift.tt/39WoSV6
Coca-Cola throws every media and creative account up for grabs in global agency review - AdAge.com
"Media" - Google News
https://ift.tt/2ybSA8a
https://ift.tt/2WhuDnP
Bagikan Berita Ini
0 Response to "Coca-Cola throws every media and creative account up for grabs in global agency review - AdAge.com"
Post a Comment