Coke reportedly took more than 6% of its UK ad budget last year and put it into social media campaigns. Sales across Europe declined 1%, though its take-home sales in the UK were up 8.3% (Britain's best-selling brand, according to The Grocer magazine).
Cola was the best selling soft drink in pubs, but Pepsi beat out Coke as the top performer in 2010. Coke also upped its overall UK marketing spend "in the mid-single digits or more," throwing lots more money at sponsorships and in-store promotions.
Here in the US during 2010, Pepsi launched its much-heralded "Pepsi Refresh" social media philanthropy campaign and concurrently fell to third place behind Diet Coke. All Cola sales were flat, and both Pepsi and Coke have announced plans to up the ante significantly on marketing expenditures in 2011 (primarily on traditional media, though the Refresh project and Coke's My Coke Rewards online programs will continue).
The soda pop business is in trouble, isn't it? I'd suggest Coke and Pepsi (and their smaller lagging competitors) find themselves at the bleeding edge of the changing marketplace for brands. So many of the ideas upon which these businesses were built just no longer have much currency, irrespective of how expertly they're translated into new media:
- We know it's only flavored bubbly brown water. Awareness of these brands always required a suspension of disbelief, or perhaps a willful disregard for what we knew to be true. While it's true that any thing is ultimately "a thing," there's lots of room for, say, cars or insurance policies to actually vary from one another, even if at first glimpse they seem generic. Try to make the case for the subtle nuances of flavor that distinguish Coke from Pepsi, but at best they're two similarly generic products. The only thing that differentiated them what the brand marketers said about them. Their branding was nearly wholly the invention of smart, creative marketers.
- So they're perfect candidates for social interaction, right? Wrong. This is where the bleeding part starts. Today's pop liturgy says conversation is an inherent good, and that "relevance" means entertaining at the moment of consumption. "Engagement" is defined as doing just about anything to capture eyeballs and then encourage fingertips to forward these experiences of "content". The problem is that such stuff is really hard to connect back to flavored bubbly brown water; worse, since what these conversations say is often generic, by definition (since otherwise it would be rejected as overt marketing), these brands risk doing a lot of talking without communicating much of anything.
- Can consumption become a by-product of branding? The huge question for Coke, Pepsi, and the other flavors of soda pop is whether consumers want to have relationships with their brands that are all but unattached to their actual purchase behavior. Is a relationship with Pepsi more important to someone than drinking the stuff and, if so, will be somehow make money for the company? Again, this is the premise the brands and their social media theorists are pursuing. Because there's really nothing to say about the actual products they sell, the brands are giving up trying to say anything about them, at least directly. This isn't new thinking ... brand advertising promised the same thing 50 years ago and was often rejected outright. The difference now is that marketers are betting that since the mechanisms of social technologies are different, so too will be the outcomes.
I wonder. If they pull it off, it'll show the rest of us that conversations with consumers can be fact-free and still beneficial to all parties involved. My gut tells me that they'll still spend oodles on POS and other proven channels, which'll be insurance while helping to muck analyses of the social expenditures. I doubt that it'll still add up as a replacement for the traditional media world wherein Pepsi and Coke could tell us nothing that mattered and get away with it.
(Image credit: the good old days)