Hiring of Isdell is classic Coca-Cola

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The hiring of E. Neville Isdell as chairman-CEO at Coca-Cola Co. signals not only that the old guard is holding strong, but a likely return to more traditional marketing tactics-putting everything at risk, from its choice of agency partners to its branded-entertainment experiments.

In snubbing the nearly 100 outsiders and internal candidate Steven J. Heyer to succeed Doug Daft, observers said the board chose the status quo. "Everybody is shocked at Coke," said an executive close to the marketer. "The issue is, how do we move forward when we brought Methuselah out of retirement? You've basically brought in another Daft clone."

bad news for wpp?

Mr. Isdell is expected by many to be less inclined toward marketing innovations put into place at Coca-Cola in recent years, from branded-entertainment initiatives such as its "American Idol" pact; close ties with musical artists such as Mary J. Blige; its urban-rooted campaign for Sprite's Miles Thirst; cutting-edge design such as its branded environment in-mall Red Lounges, and its more innovative media choices.

Some insist the selection of Mr. Isdell, a charming, gentlemanly Irishman who spent 35 years of his career with Coke's bottling system, is bad news for WPP Group's Berlin Cameron/Red Cell, anointed agency for brand Coke by Mr. Heyer. As a favorite of Don Keough, former Coke president and director in charge of the search, Mr. Isdell is anticipated to instead favor Interpublic Group of Cos.' McCann-Erickson, which previously handled brand Coke in the U.S.

"I'm not sure you're going to see a lot of leading product innovation or advertising risk-taking that you might have seen under Heyer," said Dave Gallagher, a former Coke employee and now consumer-products practice leader for Boyden Global executive search. Coca-Cola did not make Mr. Isdell available for comment.

"Don Keough and some of the older members on the search committee think running Coca-Cola is a very special job and they wanted someone that really understands the spirit of Coca-Cola," added Mr. Gallagher. He contends that the board didn't believe outsiders could adequately grasp that "specialness" of the company.

`glory days'

"There is tremendous desire in the company to return the brand to the glory days. The brand wants to restore the magic, and advertising is a big tool to do that," said an executive close to the business. Coke's current advertising "isn't iconic on the magnitude of `Hilltop' or Mean Joe Greene," both famed commercials done by McCann. "There's a big difference between `Real' and `The Real Thing."'

In fact, the executive said Coke's board has ordered pulled two ads that tested very well but the board felt conflicted with Coke's image. One was a "Real" spot from Berlin Cameron, in which a sweaty young man puts a cold can of Coke under his armpit to cool down, and the other a Foote Cone & Belding-created Diet Coke spot that it viewed as too sexy. "The board is involved in determining what ads are going on the air or coming off and that is unusual for any company. That is a vote of no-confidence for Steve [Heyer] and Esther [Lee, Coke's chief creative officer]."

Coca-Cola declined to comment.

Few, in fact, believe Mr. Heyer will stay, although several Coke executives have lobbied with him to do so, said one insider. "It seems unlikely to us that Steve Heyer will remain at KO much longer," said Caroline Levy, beverage analyst with UBS Warburg. "Thus, it seems realistic to expect KO to experience more corporate upheaval."

Mr. Heyer did not return calls or e-mails for comment.

"Transition to CEO-elect Neville Isdell is a safe choice in the boardroom and with bottlers, calming fears of radical change or bar lowering," said Marc Greenberg, beverage analyst for Deutsche Bank Securities. "Everybody likes vanilla."

One casualty could be Berlin Cameron. Although it is unlikely Mr. Isdell would look at its agency roster within his first 120 days, at least three executives noted Mr. Neville's close ties to McCann, which, like Berlin Cameron and the marketer, declined to comment. Some suspect a review, others a wholesale shift. "They will switch to IPG," predicted one. "The question is whether it will be a day or a few weeks. It's IPG's business."

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