BURNETT ON BOARD IN COKE 'SEA CHANGE';SMALL AGENCIES CAN STILL EXPECT TO PLAY ROLE IN ADS

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Coca-Cola Co. Chief Marketing Officer Sergio Zyman did the predictably unpredictable last week by moving his cherished Fruitopia brand not to one of his fair-haired smaller agencies but to behemoth Leo Burnett Co.

Burnett's coup stunned the 20-some shops on the soft-drink giant's agency roster, which has mushroomed since 1993 when Mr. Zyman returned to the company after seven years as a consultant in self-imposed exile after the new Coke debacle.

While a shift was anticipated in light of Fruitopia incumbent Chiat/Day's pending merger with TBWA, most had thought the New Age beverage with a 1995 marketing budget of $30 million would go to a New Age agency like Wieden & Kennedy or Fallon McElligott Berlin.

With Chicago-based Burnett prevailing, some Coca-Cola agency executives are now forecasting a new agency paradigm at the beverage marketer that will mean renewed clout for large agencies and a reduced, but continuing, role for smaller shops.

The global agency alliance with Burnett could presage a consolidation of Coca-Cola's agency roster, said one executive who works closely with the soft-drink marketer.

"It indicates a sea change of some nature," he said. "The trimming of global agency relationships is now over. Sergio is now consolidating and making decisions for the good of the brands that need those decisions made."

That seems corroborated by Mr. Zyman's decision late last year to move Caffeine-Free Diet Coke out of Diet Coke agency Lowe & Partners/SMS, New York, to Publicis Conseil, Paris. Several months later, the $2 million Diet Sprite account was pulled from Lowe and shot into Fallon McElligott Berlin, the New York outpost of Fallon McElligott, Minneapolis, which in turn lost the Coke contour bottle project to Creative Artists Agency, Beverly Hills, Calif. Thus, this global agency executive said, smaller agencies remain in Mr. Zyman's script.

Mr. Zyman, he said, has identified three criteria for agency-brand pairings:

The ability to deliver in the marketplace, which is in part a function of size and augurs well for networks.

The ability to deliver a creative platform which, arguably, bodes well for smaller shops.

The role of spoiler-Mr. Zyman may tie up any size agency just to keep it away from the competition.

Smaller agencies don't read the writing on the wall quite that way.

To one executive, Burnett's appointment means only that "Sergio is working with everybody, flexing his muscles to show he can get every agency in the world no matter how big and greedy they are to work for almost nothing." To wit, he said, Chiat in New York drew down only $1 million in total revenues for its work on Fruitopia. Mr. Zyman didn't return phone calls.

Chiat's smaller Cherry Coke account soon will move, confirmed a Coca-Cola spokesman. And as Hollywood power broker Michael Ovitz orchestrates his own move from CAA to chairman of MCA, the advertising future of CAA client Coca-Cola Classic is also in question.

That $85 million account is being eyed by all Coca-Cola agencies though many believe Mr. Ovitz will take it with him.

If Mr. Ovitz recruits key players, especially CAA's Shelly Hochron, Coca-Cola could follow.

But some Hollywood entertainment executives wonder how that would work logistically. Said one: "With all the other things he'll have to do, I not only wonder if he'd have the time but if he'll have the interest to handle an ad account."

More problematic would be Mr. Ovitz's perceived conflict of interest-an issue he has skirted at CAA-at MCA, where Pepsi-Cola Co. has ties to a number of Universal Studio properties including this summer's movie release "Casper."

And the question remains how tied is Mr. Zyman to Mr. Ovitz? Officially, Mr. Ovitz was recruited to Coca-Cola by former Chief Marketing Officer Peter Sealey while Mr. Zyman was a consultant. But, the directive to hire Mr. Ovitz, one Coca-Cola agency executive said, came from board member and investment guru Herb Allen and former Coca-Cola President-Chief Operating Officer Donald Keough, now chairman of Allen & Co., Mr. Allen's bank investment company.

Burnett, for now, has to get a handle on Fruitopia, which it won based on work for Coca-Cola in Scandinavia and Fanta in Italy, as well as other special Coca-Cola projects in four other countries over the past 18 months. Burnett is now responsible for creative and most of the media buying for Fruitopia.

For the 52 weeks ending March 26, Fruitopia's sales totaled $20.4 million in the U.S., according to Information Resources Inc. The fruit drink, now sold in seven countries and ready to move into Latin America, is ripe for global expansion.

To take Fruitopia, Burnett resigned the $25 million U.S. 7UP account. Since 7UP's January purchase by Cadbury Beverages North America, executives close to the agency said, Burnett was uneasy dealing with new management and frustrated by restrictions on expanding outside the U.S. Pepsi-Cola Co. owns the international piece of 7UP, handled by BBDO. A closed review is expected during the next month.

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