Coca-Cola focuses on digital

23 July 2009

ATLANTA: Coca-Cola, the US soft drinks giant, is looking to increase its activity on digital media, as it seeks to tap into changing consumer behaviour around the world, the company's president/ceo, Muhtar Kent, has said.

During the last quarter, Coca-Cola's profits rose to $2.0 billion (€1.4bn; £1.2bn) from $1.4bn in the same period a year earlier, largely due to double-digit sales growth in countries like India and China.

Speaking during a conference call, Kent argued that "while traditional marketing avenues will continue to play a critical role as a key medium to connect our brands with consumer passions, we are also shifting to more digital media."

One area where the beverage manufacturer has already achieved considerable success is on Facebook, the social networking portal, where a page set up by two "fans" of its eponymous cola brand now has over 3 million "friends".

Kent further argued that "globally, 19 million consumers, of which over 40% are under the age of 25, are registered in our databases to engage with our brands by our loyalty and online brand experiences."

This includes 12 million people signed up to My Coke Rewards in the US, where they can use codes printed on Coca-Cola products to claim rewards from magazine subscriptions to goods made by Nike.

According to Kent, this initiative constitutes "the largest online consumer packaged goods programme", and is one major example of the progress the company is making in the digital space.

Other innovative strategies adopted by the Atlanta-based corporation include the release of a song entitled Open Happiness, which ties in with its most recent marketing positioning, but also carries a minimal amount of branding.

More than 600,000 people have downloaded the song from MySpace, and it has also taken the number one position on the music download chart operated by Baidu, one of China's biggest web portals.

It has also recently premiered on MTV in America, without Coca-Cola having to pay the channel in any way for this exposure.

With regard to the company's broader strategy, Kent said "there is no better time to invest in our brands than today."

Indeed, he added that marketing communications are a key part of its bid to emerge from the downturn "stronger with our brands, stronger with our system, than when we went into this crisis."

However, the owner of Sprite and Fanta is also "driving efficiencies in media", as part of its longer-term aim "to get more for our money and steadily build up our impressions."

As a result, in 17 of its top 21 markets, Coca-Cola's "GRP costs were down and therefore look at our marketing spend with a view that there's tremendous pressure on pricing in terms of advertising," during the last quarter, Kent said.

Data sourced from Seeking Alpha; additional content by WARC staff