The Coca-Cola Company has named WPP as its global marketing network partner across 200 countries and territories, including the Indian market.
“The majority of our creative work will go through WPP; however, due to the strategic roster, our teams will continue to leverage other agencies for creative,” said a Coca-Cola spokesperson to BestMediaInfo.com.
The company has named Dentsu as its complementary media partner in Japan and Korea where they bring distinctive strengths. This leaves WPP with about 90% of the media business in the rest of the markets.
Coca-Cola has also formed a strategic roster of approved agencies from Publicis and Interpublic (IPG) to provide access to the best creative minds, regardless of their location or affiliation.
This has come as a blow to IPG’s Lodestar UM and McCann Worldgroup in India, which previously had been handling the brand’s media and creative duties respectively.
Lodestar UM has been handling Coca-Cola’s media mandate since 2010. Previously, the account was with Madison for about a decade.
The account size in India is pegged to be around Rs 300 crore. The global account size of the Coca-Cola business is pegged to be around $4 billion (Rs 30,000 crore).
The company reported worldwide ad spending of $2.78 billion in 2020, down sharply from pre-pandemic spending of $4.25 billion in 2019. But Coke is plowing more money into marketing this year as countries emerge from COVID lockdowns and business picks up from Coke-serving venues such as bars, restaurants, concerts venues and sports stadiums. Worldwide ad spending jumped to $3.2 billion in the first nine months of 2021 from $2.1 billion for the same period of 2020, the company reported, as third quarter total sales volume surpassed 2019 results for the first time since the pandemic began.
The pitch was called last year and saw participation from all of the major holding companies, including WPP, IPG, Dentsu, Publicis and Accenture Interactive.
WPP will form a new team “OpenX”, which will provide end-to-end capabilities across creative, media and data to serve as the global marketing network partner for Coca-Cola’s brands.
In a press statement, the company said, “The global marketing network partner will play a key role in executing a new marketing model that is built to drive long-term growth for the entire company’s portfolio of brands across more than 200 countries and territories.”
It further read, “Coca-Cola’s new, integrated agency model is part of an aggressive agenda to transform and modernise marketing and innovation as key drivers of the company’s profitable growth.”
“Consumers respond to an entire experience – they don’t separate the message from the medium – and that’s why we’ve designed an agency model to be truly consumer-centric and silo-free,” said Manolo Arroyo, Global Chief Marketing Officer for The Coca-Cola Company. “This model is about the seamless integration of the power of big, bold ideas and creativity within experiences, amplified by media and data. It will enable us to create end-to-end experiences that are grounded in data-rich insights and optimised real-time, at scale, as we learn from consumers.”
Coca-Cola stated, “The breadth and depth of the partnership are unprecedented for Coca-Cola and is expected to be a catalyst in the transformation of marketing effectiveness and efficiency. It is also unprecedented for the industry, given its scale and geographical reach, including more than 200 countries and territories; the company’s five-category beverage portfolio; and Global Ventures, including innocent and Costa.”
On naming Dentsu as its complementary media partner, “Dentsu is an incredible agency that combines rich human insights with the leading-edge analytics and technology capabilities required to design and execute connected consumer experiences. They are the perfect complimentary partner for us, bringing distinctive strengths in some of our highest priority areas.”
Publicis and IPG agencies in Coca-Cola’s strategic roster of approved agencies:
Coca-Cola will also ensure it has access to the world’s best creators through the development of an “open-source” creative model. “We know brilliant creative ideas come from anywhere, and we will retain that flexibility,” Arroyo said.
Publicis Groupe and IPG both performed very strongly during the review process, demonstrating leading-edge capabilities, innovative ideas and impressive talent. Various agencies from both networks have been selected for Coca-Cola’s strategic roster and will play key roles in the open-source model, which is expected to account for one-third of all marketing work.
“I want to particularly recognise the work performed by the other finalist, Publicis Groupe. Publicis demonstrated being a phenomenal agency with a bold vision that challenged our thinking, making it one of our most challenging business decisions we have confronted, given its world-class capabilities,” Arroyo said. “Agencies like Publicis and Leo Burnett blend creativity with data and technology, and I’m excited to work with them as part of our strategic roster.”
“IPG has consistently demonstrated a passion for Coca-Cola brands and delivered some of our most important work around the world,” Arroyo said. “Their agencies like McCann and Mercado will continue to be key partners for the company.”
The company will also form a common data and technology platform that connects marketing teams of five global categories, nine operating units, global ventures and platform services to the global marketing network partner, complementary media partner and strategic roster.
“As we designed our new marketing operating model, it became increasingly clear that simplicity was critical to successfully operating a vast geographical and diversified business network, which also includes our bottling system,” Arroyo said. “I am delighted to be partnering with WPP as we accelerate our marketing transformation. We were impressed by WPP’s ability to balance what it takes to deliver integrated consumer experiences at a global scale with the agility, speed and data-driven insights that are required to win locally. WPP will bring creative excellence and unparalleled marketing capabilities at a global scale that no other network can deploy.”
“We are delighted to be appointed as The Coca-Cola Company’s global marketing network partner, a catalyst for its transformation and growth, and to bring the outstanding creativity, data-rich insights and media expertise needed to create connected consumer experiences,” said Mark Read, CEO of WPP. “This partnership, integrating our capabilities across content, media, data, production and technology, operating locally and globally, will complement The Coca-Cola Company’s globally networked organization. It’s unparalleled in our industry in terms of breadth and depth of capabilities, and reflects WPP’s scale and reach around the world. I’d like to thank Manolo Arroyo and his teams for taking this bold step with WPP. Our success in the industry’s biggest-ever pitch is testament to the talent and hard work of hundreds of people across WPP and our agencies, and to the strength of our simple, integrated offer to clients.”
Implementation of the new marketing model will begin immediately. PwC advised on the global marketing network partner and strategic roster reviews, and MediaSense was the consultant on the complementary media partner review.