NEW YORK (AdAge.com) -- Coca-Cola has taken the first step toward trimming its global agency roster.
The soft-drink company has winnowed its European agencies from more than 20 to just four in an effort to realize marketing efficiencies and produce a more uniform message. The remaining shops on the Coca-Cola brand in Europe are Wieden & Kennedy, Amsterdam; Mother, London; McCann Erickson, Spain; and Sra. Rushmore, Madrid.
"We are evolving our agency model to get the most compelling, effective and scalable work we can on our global brands," said Lynne Crowther, a spokeswoman for Coca-Cola Europe. "This will instill greater ad-agency collaboration to drive truly integrated marketing communications."
According to executives familiar with the situation, there was duplication of work across agencies, and some were churning out mediocre work. That led Coke to believe it would save money and improve the quality of its advertising by narrowing its roster to its four best agencies.
In July, newly minted CEO Muhtar Kent said that the company would look to save between $400 million and $500 million a year by the end of 2011. Marketing was said to be a primary area of focus, with the company looking to leverage best practices for creative and overall marketing execution around the world, as well as optimize its use of agencies.
The company has had success rolling out a global message from local agencies on several occasions, most recently with its Beijing Olympics program. The commercials "Unity," created by Wieden & Kennedy, Portland, Ore., and "Bird's Nest Stadium," created by the agency's Amsterdam office, ran in more than 25 countries.
"We're looking for scalable work on all of our brands. Generally, what that means is we may have fewer agencies," said Petro Kacur, a Coca-Cola spokesman. "We're looking at this globally. ... We're looking to evolve the model across the world."
$2.7 billion spent globally
Mr. Kacur declined to comment on additional markets or agencies that might be affected by the review, saying only that the company is in the process of looking at its global marketing structure. Globally, the company spent more than $2.7 billion on advertising in 2007, according to its annual report.
Still, one person close to the marketer said there are significant issues to iron out. There are more than two dozen marketing directors in place across Europe, and it's unclear what their role will be as some local agencies are eliminated.
Mr. Kacur said the marketing shakeup is limited to agencies and will not affect Coca-Cola's internal marketing structure. "All of what we are looking at is aimed at getting collaboration among the agencies that we work with, so that we've got an integrated approach," he said.