At this year's Super Bowl, Faris Yakob observed a strange form of marketing competition between Coca-Cola and Pepsi. Here's what the two brands’ Super Bowl predicament tells us about advertising and its often tricky relationship with its cousin, sales.
We were in Atlanta this week to host a digital summit for Coca-Cola and their retail customers. Coincidentally, it was also the Super Bowl and, through a series of fortunate events, we ended up being given tickets. Being at the game itself meant we didn’t see the television advertisements— but we did get to witness the pageantry of the most watched event in the USA, which is always a battleground for brands. This year that was especially evident on the ground because Atlanta is, of course, Coke country while Pepsi is one of the Super Bowl’s biggest sponsors.
Pepsi blanketed the city with more than 350 rather cheeky billboards, capitalizing on their challenger brand status by making some subtle (and no-so-subtle) digs at their bigger competitor. One billboard read “Pepsi in Atlanta. How Refreshing” and the brand erected a bronze statue of its founder Caleb Bradham holding a cup of his beverage directly in front a very similar bronze of Coke’s creator John Pemberton outside the World of Coke museum. [Did you know: Pepsi was originally called Brad’s Drink, before changing its name to indicate that it was a treatment for indigestion or dyspepsia.]
It’s all fun and games until lawyers get involved. The NFL is famously extremely aggressive in protecting its most valuable asset’s trademark and they treat their sponsor brands just as seriously. When a city bids for the Super Bowl, they have to guarantee permit zones that prevent other brands from borrowing some of that attention. However, the Mercedes Benz stadium which hosted the game this year is a Coke venue — meaning it only serves Coke products, and has their Freestyle machines and other branded vending machines in almost every nook.
A compromise was reached, as this isn’t an unusual situation. The stadium served Dasani water with the labels cut off, and Coke from the soda guns, but sans red branded cups. Perhaps the average customer didn’t notice, but as marketing professionals, it certainly stood out to us how much mental and physical availability is created by having Coke vending machines all over a venue. Vending machines are advertisements as well as convenience stores, but the categories we use to describe them, and the budgets they are funded with, are separate. [One of the shopping malls we stopped into on the way had hanging banners promoting their new Pepsi vending machines, confusing things even further.]
At Coca Cola’s Digital Summit, a start-up called Stockwell exhibited their product which is an app enabled vending machine concept for apartment buildings that has a clear glass screen, displaying a curated and sponsored set of brands clearly in your lobby. A robotic vehicle company called Nuro showed their vision for free on demand delivery. It has a live pilot running in Scottsdale [Arizona] and highlighted how you can use part of the vehicle to promote other, complimentary products. So, are these promotional exposures advertising or not?
Most consumers are unaware of how much money is spent in trade marketing, which is how manufacturers buy shelf space and visibility at retailers, or indeed that they pay for placement at all. In fact, trade marketing is the biggest line item, taking up nearly 50% of all consumer packaged goods marketing budgets. This isn’t characterized as advertising, but that delineation is breaking down, as analyst and VC Benedict Evans recently pointed out.
In the quest to reach customers, old definitions are blurring. Paying for placement in Walmart is trade marketing, but paying for placement on Amazon is considered advertising. In 2018, more people started product searches on Amazon that on Google for the first time, which is why advertising is the fastest growing part of the business. As with so many other things, digital blurs the lines here, making brands question how they spend money and which departments get to manage those efforts.
Coca-Cola and Mondelez both recently collapsed their marketing and commercial silos into a single ‘growth’ department. When budgets are allocated to different channels and groups in advance, it’s hard to argue that what we call something is irrelevant. In order for brands to be strategic and agile in their marketing, these definitions will need to evolve to maintain the mental and physical availability needed to make brands grow.