Coca-Cola and ANA members rethink agency evaluation

Geoffrey Precourt

There are only a handful of advertisers with the authority and influence to change the way marketing is practised.

To effect real change, a company needs not just size but the reliability and credibility of history and, ideally, a little moral authority - a combination that evokes leadership not mutiny.

In 2006, the Coca-Cola Co. quietly began investigating a new compensation model that essentially could blow up the commission and fee systems that have supported the agency business for decades. And it was a change so thorough and so radical that it could have only come from the likes of a Coca-Cola.

In 2008, Coca-Cola spent an estimated $3 billion on global advertising. And, according to Sarah Armstrong, director/Worldwide Media & Communication Operations, the Coca-Cola Co., the manner in which those funds are allocated will be revised, with the marketer initiating a compensation standard for all local and global marketing initiatives within the next three years.
"From 1935 to 1995," Armstrong told an Association of National Advertisers (ANA) Agency/Client Forum that was a feature of New York's 2009 Advertising Week, "we operated with a commission system. Sometimes, it was fair to the Coca-Cola Co. And sometimes it was fair to the agencies.