Coke taps Berlin insights

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Coca-Cola Co. is tapping Berlin Cameron/Red Cell for insights on the coveted $500 million Coca-Cola Classic account. The development appears to give the New York shop a crack at Coca-Cola's flagship brand, which contributes 45% of the company's North American carbonated soft-drink volume, while strengthening the relationship between parent WPP Group and the Atlanta soft-drink giant.

In a statement, Steve Heyer, president-chief operating officer for Coca-Cola Ventures, confirmed that "Berlin Cameron has developed insights into the youth market that we think may be relevant to advertising for Classic. We have therefore asked Berlin Cameron, working through Interpublic, to share these insights so we can explore whether they should be incorporated into ongoing development of the Coke Classic work." However, he strongly denied the development bodes ill for Interpublic Group of Cos., named global creative consultant for the Coca-Cola brand in December 2000.

"Interpublic is and will remain the agency of record for brand Coke," said Mr. Heyer. "All current alignments between our brands and our agency partners remain unchanged, as well as our relationships with our holding company partners."

Interpublic referred calls to Coca-Cola.

"We absolutely are not working on Coke Classic," said Red Cell Co-CEO Andy Berlin, co-founder of Berlin Cameron. "We've not been asked to work on Coke Classic, and we've not volunteered to work on Coke Classic."

But others close to both Berlin Cameron and Interpublic said the move could have significant ramifications for the future makeup of Coca-Cola's roster. "Only Atlanta knows the answer," said an executive close to Interpublic when asked how duties might be shared on the brand.

Coca-Cola is one of the top clients at Interpublic, which has been on the soda giant's roster since World War II.

Berlin has been a Coca-Cola agency since the shop's founding in 1997. Its Mello Yello, Cool from Nestea and Pibb Xtra ads have won rave reviews from bottlers, and Berlin Cameron has helped bring No. 2 Dasani within spitting distance of overtaking PepsiCo's Aquafina, the bottled-water leader. WPP bought Berlin Cameron in December.

pressure from the street

While Wall Street is more bullish of late toward Coca-Cola, it remains under pressure to improve sales and profits. Twice last year it was forced to revise optimistic volume targets. Its share price has underperformed the S&P 500 since 2000, its stock price is 30% off its five-year high, and rival PepsiCo's Pepsi-Cola North America appears to have the innovation advantage with products including Mountain Dew's Code Red. "There's strong pressure to do something," said a former executive. "They've got to break out-not just stay steady."

That stress has worked its way to McCann-Erickson Worldwide, the flagship's lead shop, in part because of its lackluster 2001 "Life Tastes Good" drive and its inability to deliver an acceptable branding campaign for the world's leading soft drink during the summer crunch season. To maintain its hold on Coke, McCann has solicited creative from Interpublic siblings. According to one person familiar with Coca-Cola, in-network contributions are on the rise. Observers say Coca-Cola's difficulty rebounding will haunt Interpublic, as clients often blame agencies for stalled turnarounds.

The emergence of Berlin Cameron was unexpected. Onlookers had been betting on WPP's Ogilvy & Mather, New York, which handles the $100 million Fanta and Sprite accounts, to wheedle its way onto brand Coke's roster.

contributing: lisa sanders

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