Commentary by Jonah Bloom

Coca-Cola Needs Innovation, Not a Flock of New Ads

Saying More and Shouting Louder Isn't a Growth Strategy

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Coca-Cola Co. sounds a lot like it's banking on ads for growth. In outlining its plans earlier
Jonah Bloom, executive editor of Advertising Age.
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this month the CEO said the company needs a greater share of voice. The CMO said it needs more ads promoting Coke's broad appeal. The VP of corporate marketing asked for a return to the heartstring-twanging ads of old.

More, better advertising might help. I doubt share of mind is an issue -- most people on this planet know Coke, know if and when they like it and have an emotional connection with the brand -- but it can pay to jog memories. And, of course, the right ads could help Coke connect with those younger consumers for whom Coke is another thing, not the real thing.

Commercially overloaded world
Still, in today's commercially overloaded world (can we stop saying "cluttered," as if it were just a few toys strewn around a kid's bedroom?), saying more or shouting louder is not a solid growth strategy. Affecting spots may pay dividends, but when media-savvy 8-year-olds can sniff out a marketing play at 10 paces, the line between touching and cheesy off-putting is very fine. (Incidentally, I thought Coke's recent "Summer" campaign by Berlin Cameron was great youth-oriented work.)

Ads may help stem Coke's sales decline, but with ever-broadening beverage choice and growing health-consciousness, companywide growth is more likely to come from new products and platforms. Ex-Coke CMO Sergio Zyman's latest book insists you renovate before you innovate, but Coke needs to build new houses, not just fix up the old mansion.

Anticipating need
Marsha Lindsay, CEO of Lindsay Stone & Briggs, a marketing agency that focuses on product development, believes innovation is the difference between the CMO and the super-CMO: "The best companies define marketing as driving growth, and the game-changing big idea is the best way to achieve that." Lindsay says the trick is to look for a scaleable platform that not only responds to a new consumer need but anticipates it. Think Kraft's Lunchables, P&G's Swiffer, Crest Whitestrips or Apple's iPod.

Coke's manifesto for growth made mention of innovation, and the company has a dedicated innovation unit earmarked for some of the increased investment. But it doesn't seem to be a marketing focal point, as it is at, say, PepsiCo.

As well as acquiring innovators, such as Sobe and Gatorade, PepsiCo has created a culture of innovation. Chad Dick, director of marketing at its platform-innovation unit, describes it as the "lifeblood of our marketing," adding, "we create the news that drives the ads."

Spawning new products
Pepsi's dedicated innovation groups, broken out from brand-management roles five years ago, have spawned such products as Mountain Dew Code Red, Amp, Aquafina, Propel and Starbucks Doubleshot, as well as new packaging, distribution systems and even fresh ad approaches like the Pepsi Smash campaign.

In addition to brand-based innovation groups, Pepsi recently created Dick's cross-company unit. "By unshackling ourselves from the current brand definitions we hope to open up new options," he says. Example? "Maybe we take food brands into beverages or vice versa."

You're right, liquid Cheetos would be bad, and we can all point to New Coke or Pepsi Blue as evidence of innovative failure -- albeit New Coke did an amazing job of reminding us we loved old Coke. But Coke's top execs must be brave, because more ads won't be enough to retake the hilltop.

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