Diet Coke Is In Decline, But Ad Spending Is Not
Diet Coke sales keep falling. But the marketing investment behind the struggling soda will keep flowing in the U.S. this year -- even as Coke adopts a "one-brand" strategy globally meant to unite sub-brands under one campaign.
Coca-Cola Co. is planning significant media support for a new Diet Coke packaging design program launched last week called "It's Mine." The initiative involves dressing cans and bottles in millions of unique, colorful designs. A new 15-second TV ad debuting tonight on CBS during "Super Girl" shows a woman dressed in a business suit flying through the air as she pursues a colorful Diet Coke bottle and finally catches it. The spot -- which includes a cover of the Queen song "I Want it All" -- is shot entirely in black-and-white, except for the bottle. Another new TV ad will begin running in late February.
The creative approach continues the kind of fashion-forward, female-centric tone Diet Coke has frequently deployed. As part of the new campaign, Diet Coke signed up Brad Goreski, host of of the E!'s "Fashion Police" show, to host an "It's Mine pop-up fashion house" in New York City during Fashion Week.
Globally, Coke wants to move away from typecasting for sub-brands like Diet Coke and Coke Zero, which the marketer now calls "variants." The new "Taste the Feeling Campaign" includes images of all of the variants.
Under the old segmented approach, "implicitly we were saying that Coca-Cola is no longer for everybody," Global Chief Marketing Officer Marcos de Quinto told Ad Age recently, as he outlined the "one-brand" strategy. "We were damaging the pure core of what the Coca Cola brand is -- that it's a brand for everybody."
But in the U.S., where Diet Coke remains a big brand, marketing executives are in no hurry to dump Diet Coke specific marketing, even as "Taste the Feeling" ads run here.
"In North America, Diet Coke has so much equity," said Rafael Acevedo, group director for Diet Coke, Coca-Cola North America. "You will continue to see future executions that will be completely based on Diet Coke by itself and communicating its own personality and really connecting with the loyal consumer base that it has."
Diet Coke got $44 million in measured media support in 2014, the latest full-year available from Kantar Media. The company did not share dollar spending plans for 2016. But a company spokeswoman said Diet Coke is putting a "strong media investment" behind the "It's Mine" campaign, including in-store, print, out-of-home, digital and social media. TV ads will run on network and cable outlets including ABC, NBC, CBS, E!, Bravo and more. The "It's Mine" 30-second TV ad will air in primetime today on "Super Girl" on CBS.
Last year, Diet Coke ran three ads during the Academy Awards. The brand has not yet confirmed its 2016 Oscars plans.
The line "It's Mine" in the new ads come from an insight that "Diet Coke lovers absolutely love the taste of Diet Coke and it's not something they want to share with others," said Danielle Henry, group director for integrated marketing content. The unique packaging designs were created in partnership with HP, which automated millions of unique graphics based on 36 base designs that were inspired by the "bubbles, fizz, taste and spirit" of Diet Coke, according to a statement.
But some of Diet Coke's sales fizz has gone flat in recent years as the brand continues to lose drinkers amid headwinds in the total diet soda category. Last year marked the tenth straight year that sales volumes of major no-calorie soda brands declined, Beverage-Digest reported last week. Retail sales of Diet Coke fell 5.9%, while Diet Pepsi dropped 7%, the publication reported. The report noted that diet soda brands appear to be losing drinkers to sparkling waters. Talking Rain's Sparkling Ice brand, for instance, grew retail volumes by 6.4% in 2015, according to Beverage-Digest.
If Diet Coke continues to fall, the brand must decide if it will continue spending on marketing to slow the decline, or "Do you just give up?" Beverage-Digest Editor Duane Stanford said in an interview. But he added: "If there is one thing about Coke, you can expect they are not going to give up." Diet Coke "is still a profitable product that provides a lot of cash."
Said Mr. Acevedo: "The best way to continue to improve our trend within the category is to remain consistent with our strategy" which includes marketing that touts Diet Coke's taste.