Coke pours more online, chases next generation

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Coca-Cola Co. plans to triple its online budget this year.

So what can a classic mass marketer like Coca-Cola hope to achieve online-a medium so far best used by brands with complex stories to tell? For starters, a better connection with consumers between the ages of 12 and 24, as well as a way to target, and explain, its rapidly expanding portfolio of Coke varieties and sub-brands to smaller slices of the market.

Coke spent $3.3 million on interactive media last year, according to TNS Media Intelligence. That's a drop in the bucket of its overall media spending of $378.4 million. Although TNS data only records that Coke spent less than 1% of its total media spending online, an executive with knowledge of the company's plans said interactive spending was closer to 3% of the full media budget last year, and that it is planning to up that to as much as 10%

Last week, the company launched Coca-Cola Zero, which is aimed at young men who want no calories, but won't be seen with a diet drink. A Web effort is in the works to reach those young men, the company confirmed, and interactive hot shop AKQA San Francisco was tapped for the assignment. The company already has had success reaching men online through its Coca-Cola NCAA championship interactive game linked to the NCAA Web site, now in its second year. Coke also rolled out a music-entertainment site on MSN for its Sprite brand featuring the animated character Miles Thirst and top-40 DJs who share their mostly hip-hop play lists.

"Coke needs to accomplish relevancy with the teen demographic," said Steve Yanovsky, who runs lifestyle marketing company Brand Alchemy. "It has tried to create relevancy with music [at], and now it is trying to create relevancy with Miles Thirst."

The soda maker needs to fine tune its traditional brand attributes in a way that resonates with teens. "Coke is positioning itself to be a virtual emcee for integrated content in the future and is experimenting with a variety of new media where it can develop that role," David Raines, Coca-Cola's VP-media said in a speech March 3.

It's hard to measure market share among teens, who say they have consumed about the same number of glasses of Coke as Pepsi in the last seven days, according to a survey of 2,000 consumers between 12 and 19 done by market research firm Teenage Research Unlimited in January and February. But PepsiCo brands are far ahead of Coca-Cola's in the teen mindset, analysts said.

"Coke is desperate to get a hold of the younger audience and Pepsi's share among younger people is much higher," said Christie Nordheilm, associate professor at the University of Michigan's graduate business school.

What's helped PepsiCo the most is Pepsi's two-year old pact with iTunes that lets consumers win a free song on Apple's iTunes music site and an entry into a sweepstakes to win an iPod mini. Deals with pop stars Beyonce and Britney Spears have helped, too. And, a Mountain Dew Online Survival Kit, started in March by Omnicom's BBDO, offers jokey accessories to help the young male bluff his way through March Madness.


Coca-Cola's Sprite effort, meanwhile, is a good start, but has a number of flaws, observers said. One big problem is the site is hard to find. Tucked away on MSN Music, potential visitors are prompted to find if they happen to catch one of the occasionally appearing links or ads on MSN's home page or MSN music's page. "Teens are never going to find more about your brand if they have to work at it," said Rob Callendar of TRU.

Housing the site at MSN in general is also a gamble. Although teens rate MSN fifth in popularity, the portal is only trafficked by 4% of them compared with first place Yahoo with 23%, according to Mr. Callendar. MSN counters that an estimated 17 million of its users are in the 12-to-24-age bracket. And advertising across the Web and in other channels will start soon, said Geoff Cottrill, group director-entertainment marketing at Coca-Cola.

Coca-Cola said it's stepped way beyond previous boundaries with this effort. For Sprite, it's a way to "go beyond the 30-second commercial," Mr. Cottrill said. He points to an MSN Messenger feature that lets users have Thirst speak a message for them, but he said the real golden egg is the DJs. "Letting consumers interact with DJs facilitates a way for them to interact," he said.

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