Coca-Cola's recent megadeal with AOL signals a new marketing strategy that includes more online visibility. Coke also teamed with NTT DoCoMo in Japan, giving away mobile phones and plans to do the same in Europe. Its new decentralization strategy enables individual markets to develop localized products. But this branding strategy is nothing new as far as dot-coms are concerned. Can Coke possibly be a market-leading brand by following the leader?
Over the past two weeks, I’ve discussed how superbrands appear to have lost their claim to that prefix and how they have relaxed back into the complacent comfort of being merely traditional brands. The old brand giants seem to have lost the innovative edge, quashed any burgeoning flexibility with the bureaucratic process, and succumbed to the arrogance they’d cultivated during decades of market dominance. Coca-Cola was one of my examples. And Coke has recently announced its fight to get its old fizz back again.
I guess it will be to nobody’s surprise to hear that Coke’s secret weapon is to be found online, as evidenced by the company’s marketing campaign and its recent megadeal with AOL. More than encompassing an exchange of marketing services, the mammoth deal aims to integrate new communication channels, like Mobile Internet, with Coca-Cola’s communication portfolio.
Already Coca-Cola has teamed up with NTT DoCoMo in Japan, sending singing icons to millions of Japanese Coke drinkers. And the company is planning to give away 100,000 WAP-enabled mobile phones free of charge to users across Europe. These giveaways will bear branded messages aimed at Coke’s core audience.
These developments aren’t so surprising. What is remarkable is the fact that Coca-Cola, for the first time in decades, is outsourcing its marketing decisions and responsibilities to individual markets. Its Atlanta headquarters has seen the benefits of the global brand assuming a local voice.
This decentralization strategy is perhaps one of the biggest moves Coke has ever made, bureaucratically and culturally speaking. There’s apparently a world beyond the United States, and local-market knowledge has it covered. The new strategy enables individual markets to develop localized products that address market needs and ensure a steady stream of product innovation.
But back to the AOL deal. It’s frightening to think that Coca-Cola spent only $1.1 million on online advertising last year. The figure has changed with the AOL deal, which is estimated to be worth $64 million over a two-year period. That’s an increase of 3,000 percent over last year. Five percent of the total marketing budget is dedicated to online activities, an impressive figure compared to what was spent in the past. But not so impressive compared to Coca-Cola’s television advertising budget for last year was $500 million.
So, the Coke brand is reinventing itself. It’s busy dusting itself off, but has the brand left its workout too late? The initiatives I’ve briefly mentioned are new to Coca-Cola. But they’re old as far as any dot-com company is concerned. Decentralization is far from a new strategy. The most unwieldy public departments have been engineering such a policy for years. Teaming up with AOL wasn’t unpredictable. And the wireless initiative? Any self-respecting brand would race into the wireless world at 100 miles per hour.
The problem for Coke is that everyone else is doing the same thing. So even though these initiatives may be revolutionary for Coke, they are merely a “follow the leader” strategy. The pity is that the leader is no longer Coke. That role has been usurped by technology companies. My question is: By following the leader, can you possibly be a market-leading brand?
