WPP has a Coke and a smile after winning $4bn pitch prize
Coca-Cola has selected communications giant WPP to head up its global marketing efforts. After nearly a year-long pitch process, WPP secured the majority of the brand’s $4bn marketing business in what Coke says is the biggest marketing deal in the brand’s history. The holding company will lead Coke in “executing a new marketing model that is built to drive long-term growth for the entire company’s portfolio of brands,” per a statement released today.
Coke taps WPP to head up its global marketing efforts
As part of the announcement, the soft drinks giant has also introduced a new agency model designed to drive growth and innovation. Here’s what you need to know.
What happened
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As part of the brand’s new marketing strategy, Coke has named WPP its new Global Marketing Network Partner. In the deal, WPP has secured a majority of the brand’s $4bn marketing business.
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Under the contract, a bespoke WPP team dubbed OpenX will be responsible for the Coke account, offering end-to-end creative, media and data services.
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The deal is the result of a much-hyped and long-awaited pitch that kicked off in December last year.
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Coke said in today’s statement that both the depth and breadth of the WPP scope are greater than any other marketing partnership in the brand’s history. WPP is expected to serve as “a catalyst in the transformation of marketing effectiveness and efficiency.” The brand also emphasized that the deal is “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.”
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The agreement is part of Coca-Cola’s refreshed marketing strategy, centered upon its new integrated agency model, designed to break down internal silos, drive innovation and accelerate profitable growth for the brand. The new model is built around four central components:
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A global marketing network partner – the role of which has been secured by WPP – to spearhead creative, media and data and technology across the company’s portfolio
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A complementary media partner
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A strategic roster of approved agencies, which will enable Coke to tap professionals from a range of companies to contribute to creative projects
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A centralized data and tech platform through which various marketing teams can collaborate
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“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,” said Manolo Arroyo, Coke’s global chief marketing officer in a statement. “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.”
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WPP’s chief executive Mark Read said in a statement today: “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 ... and reflects WPP’s scale and reach around the world.”
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Coke also announced today that Dentsu has secured the role of complementary media partner in the new agency model. Dentsu is tasked with bringing diversified media offerings to bear in “selected markets” where “they bring distinctive strengths.”
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Plus, through Coca-Cola’s roster of approved agencies, the brand will have the ability to work with creative talent from around the globe. The company said that, in particular, it’s interested in working more directly with creatives at Publicis Groupe and IPG, noting that “both performed very strongly during the review process, demonstrating leading-edge capabilities, innovative ideas and impressive talent.” Projects from the strategic roster are expected to account for about a third of all marketing efforts for the brand.
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The new model will be implemented starting today.
Why it matters
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Today’s decision is the manifestation of a long process of intense vetting. Coca-Cola reviewed pitches from over 200 countries and evaluated capabilities across media, creative, experiential, production and martech.
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The new model – and WPP’s role in leading the brand’s marketing efforts – looks to help Coke continue its sales hot streak. Its third-quarter earnings, filed at the end of last month, indicate that, year-on-year, net revenues jumped 16% and organic revenues were up 14%. The growth was largely attributed to a spike in sales and “growth ... in markets where coronavirus-related uncertainty is abating,” per the company’s statement.
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Coke has made it clear that it would like to diversify its media and marketing mix. Under the new model, WPP will lead the charge in achieving that goal.
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Though Coke indicated that IPG will be included in the strategic roster program, the decision to tap WPP as the Global Marketing Network Partner is an assured loss for New York-based IPG, whose branch Universal McCann won the account in 2015 and held some 30% of Coke’s business.
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Today’s announcement comes on the heels of the brand’s launch of ‘Real Magic,’ its first global ad campaign in five years, which, though intended to cement and communicate a new ethos for the brand, was met with mixed reviews and garnered significant backlash among the gaming community. Under the new leadership of WPP, the brand will aim to recover from this reputational hit and bolster revenues in markets across the globe.