When Coca-Cola's global chief marketing officer Marcos de Quinto stated a few months ago that TV advertising is the best investment for brands, he showed a refreshing willingness to challenge the conventional wisdom. When de Quinto went one further and criticized his company’s history of digital spending, he outed himself as one of the rare voices of reason in the marketing industry.
He was recently joined by Procter & Gamble chief brand officer Marc Pritchard, who made it clear he was tired of waiting for digital platforms to get their measurement act together. “We will vote with our dollars,” Pritchard said, doubling down on earlier comments about inadequate viewability data from Facebook, Snapchat, Google, and others raking in billions of brand advertising budgets.
So far, only de Quinto has opened up his brand’s books to show evidence of effectiveness. Stating that "TV still offers the best ROI across media channels," he revealed that Coca-Cola has reaped a return on TV investment of $2.13 for every dollar spent. Their return on digital? Only $1.26 per dollar spent.
Digital is definitely overhyped. It can work, but the environment is cluttered, and it’s easy to spend money in ways that don’t deliver. For one thing, one of digital’s strongest points is how it can lead a consumer down the path to purchase. For an automobile brand or retail store, that’s key. But CPG products have a much less considered purchase process – one that is less likely to be made online. So the strategy of piling investment into digital for this doesn’t make much sense for those brands.
It’s also easy to squander resources on individual initiatives that have very little chance of accruing significant scale to impact on your brand or to cover the sunk cost. In Coke’s case, de Quinto cited the company’s approximately 300 branded apps, saying “most of these apps, they have less than 50,000 users or 100,000 users. That is nothing.”
TV, on the other hand, gets trashed partly because it’s so old and traditional, and partly because most TV commercials just don’t work. The reason they don’t work is because they are lousy commercials, not because TV advertising is itself a flawed medium. Because the average commercial is sub-par, TV as a medium gets slammed based on returns pulled down by bad ads. If advertisers improve the quality of their creative, they will see TV deliver a strong ROI.
This contrasts with digital, which – yes – can also drive ROI, but has systemic problems and fragmentation that makes it hard for large brands to get the breadth of coverage they need. Digital just isn’t magical for most CPG advertisers. For those brands, having killer creative for your digital display ads will still produce weaker ROI than a great TV ad. If a CPG brand does good TV commercials, that brand will see a good ROI from TV.
But what makes a “good” TV ad? The same thing that makes advertising work on any medium or platform: telling and furthering your brand’s story. Every CMO's number one job is to act as steward of your brand story for the current generation – whether that generation is a season, or spans decades. That cannot be ceded to a brand manager, an ad manager, or an agency. Those come and go, but a CMO has a large responsibility to honor the brand.
Most marketers assume everyone knows their brand, but they don’t. Maybe the brand stood for something for one generation, but the next one might never have heard of you. So it’s imperative to tell the same brand story again and again. Advertising succeeds when it focuses on the brand and helps consumers make the connection between your brand’s story and what is relevant to them as individuals. If you slide too far away from that, you are drifting from what will best serve the brand – and slacking as brand steward.
Such temptations to wander often come from the influence wielded by stereotypically out-sized egos in the agency world. Untold numbers of brands have doomed their marketing by letting their agencies steer them away from what is true for this particular brand.
With Coca-Cola spending nearly $4bn on advertising in 2015, the company employs a portfolio of agencies. Again, de Quinto displays an uncommonly sensible attiude, saying: “We don't have one agency of the record for any of our brands. We are doing constant pitches with a roster of agencies. If there is an agency that is on the roster and they don't win anything that is their problem.” This is a CMO who knows that agencies work for the brand, not the other way around.
All marketers should take a leaf out of Coca-Cola’s book, as de Quinto and his team oversee a major strategic shift to a "one-brand" approach to its advertising. Strongly associating various drinks from the Coca-Cola portfolio – so that they all align, and fit together like the trees in the forst – is a smart and yet all too seldomly seen strategy. Even better, the product bottles and cans are front and center in this new campaign. "We are re-Coca-Colizing Coca-Cola. We are going to the roots of what made this brand big," he said.
This will not be an exercise without friction – or cost – for Coca-Cola. But the message from de Quinto is clear: If you don’t stray from your roots in the first place, you’ll never have to go back to them.
Jeri Smith is chief executive of Communicus