Why Coca-Cola takes a marathon approach in the race to innovation
The success of Coca-Cola’s innovation strategy does not rely on the brand always being first in the tech space; instead, it prefers to take a more measured approach, choosing trusted partners over unknown experts, not rushing implementation and continuously reviewing its roster of agencies.
Coca-Cola takes a methodical approach to innovation
According to its online communications director, Stanislas Magniant, a “no” from Coca-Cola may not always be a bad thing for a startup or an agency. Instead, it could be a “not now”, which forms part of its calculated plan to stay on top of marketing innovation in a slow and steady way.
At The Drum’s Future of Marketing he recalled a time recently when he rejected working with a startup in France, despite his French team's enthusiasm for the potential partnership.
“It had nothing to do with their project," he said. "It’s just the fact that we’re a giant company and I know of X number of pilots that already happening in the same space. I had to nip the project in the bud before it even got started because I knew it would get killed later on.”
Why would it get killed? Because of the number of stakeholders – from procurement, IT, security, marketing – that would have a veto later on in the process.
“When something comes in you already know the hurdles you’re going to have to jump through as a brand manager,” said Magniant. “You better make sure that this thing is relevant to all stakeholders. When the agency comes in to pitch you something, they might think they’ve won it but they’ve only run the right to start the steeplechase. When you take on that pitch, you have to pitch it to other people.”
Coca-Cola’s meditative strategy for working with tech companies was made possible once the brand decided it didn’t want to place too much weight on being first, despite the temptation of an easy earned media campaign (“The press release just writes itself [if you’re the first to innovate],” said Magniant).
He continued: “It is tempting from a pure communications standpoint but doing things for communications sake … is going to put you in a difficult position. Sometimes we can move really fast, especially in smaller markets where the decision making process is quite short … but in larger markets where the brand is more visible and there are more stakeholders it can take several months. And if you’re doing something for the sake of speed, I guarantee you’re not going to be first because smaller brands will move faster than you.
“If you know you can’t be first out of the gate … then wait for others to take the risks and then do it better.”
That’s not to say that the brand doesn’t care about being on the cutting edge of innovation. But it does use the way it works with agencies to manage the risks that may come by investing in new technologies. Despite stating that Coca-Cola is “continuously reviewing our roster of agencies and working with different partners”, Magniant admitted: “You could spend a lifetime researching the expert in VR [and so on], but at the end of the day You’re probably going to be more comfortable working with the big agencies or the agencies who are already engrained with the brand, who have built that equity and trust.
“It’s even more successful if you trust these guys not to reinvent the wheel in-house, but to partner with a small shop. So instead of you going directly to the small shops, you’d rather have your big agency or your usual partner partner with the smaller shop and bring in [that expertise]. It’s a more stable but successful relationship.”
This view squares with what many startup firms believe is the best way of winning business. In a separate session at the Future of Marketing, a number of tech companies agreed traditional pitching isn’t the future due to the costs involved with developing credible prototypes. Will Francis, the founder of Vandal London, admitted he tries to avoid pitching altogether and instead is “the guy who sneaks round the back” to make connections and bag the client’s test budget.
However startups shouldn’t be dissuaded from aiming squarely for the Coca-Cola board – and not just its agencies – entirely. The brand revealed earlier this week that it has put money behind 42 start-up brands in the US alone over the past decade, and it only has plans to ramp up this strategy in the future.
And with 1,200 job cuts on the horizon, earmarked to simplify processes and speed up decision-making, now could be the time for new tech companies to find their in.