Coke Wants to Add Life to Streaming Video, Where Soda Commercials Aren’t Necessarily Welcome

The Coca-Cola Company has spent decades making soda, iced tea, fruit juice, water and something that may not be as easy to get in front of consumers in days to come: commercials.

Coca-Cola struck a chord in pop culture dozens of times over the years with clever TV ads featuring singers on a hilltop or a sympathetic “Mean” Joe Greene, but these days, many of the streaming-video services that are growing in popularity among consumers want no part of such stuff. Even those on-demand video hubs that do air commercials tend to run just a fraction of the spots seen during a night of regular primetime TV.

As a result, Coca-Cola is placing more emphasis – and dollars once earmarked for traditional advertising – on alliances with Netflix, Disney Plus and others that have little to do with the jingles and call-outs to summer cookouts and movie-going that have been hallmarks of its commercials for generations. “We want to be non-intrusive. We want to connect with consumers,” says Jeff Hagen, group director of connections planning and investment for Coca-Cola’s North American operations, in an interview. “We want to be adding to what they are doing, versus coming across and just screaming at them.”

Coca-Cola isn’t the only advertiser grappling with such efforts. More marketers are moving money from traditional TV to streaming video, secure in the knowledge that important groups of consumers can be found binge-ing and pausing with greater ease. Some media buyers say their clients are working to secure advertising relationships with Disney’s Hulu and NBCUniversal’s Peacock, realizing that significant chunks of potential customers are grazing video via an on-demand video hub more regularly than they are watching “This Is Us” or “NCIS” at a specific day and time on NBC or CBS.

“This is rich territory,” says David Lang, the chief content officer at WPP’s Mindshare, one of the nation’s biggest ad-buying operations. “I think this trend will continue, because more and more people are watching shows on the subscription services, and more and more of those shows are the most-talked about shows in popular culture. So why wouldn’t a brand do whatever they could do to be part of a show or an experience?”

Madison Avenue’s quest for streaming audiences is already evident. In a second quarter ravaged by the coronavirus, ad spending fell 10% at ABC, around 25% at CBS and Fox and approximately 28% at NBC and its local stations, according to data from research firm MoffettNathanson. Cable was worse, with ad spending at WarnerMedia’s Turner networks down 45%. Advertising at Discovery’s cable outlets was off 13.5% and down 19.3% at ViacomCBS’s cable networks, according to the research.

But spending on ad-supported streaming hubs  – much of it only a fraction of what gets placed on the TV networks – increased. Ad spending on ViacomCBS’ Pluto rose 60%, while advertising outlays at Roku rose 31.2% and spiked 12.2% at Hulu. Ad-supported streaming hubs “benefited from heightened usage and a mix shift in advertising budgets,” noted analyst Michael Nathanson in a late-August research note.

Setting up an alliance with some of the best-known streamers, however, takes more than millions in cash. Netflix, Amazon Prime and Disney Plus don’t take traditional ads (though they have been known to allow advertiser products to be woven into productions on more than one occasion).

So Coca-Cola works around the shows, not in them. But the pairings are ambitious in scope and far more difficult to put into place than a TV ad campaign.

Earlier this summer, the company used the much-anticipated debut of a taping of the Broadway smash “Hamilton” on Disney Plus to highlight a need to help local restaurants. Coca-Cola made a $1 million donation to World Central Kitchen and streamed a conversation between “Hamilton” creator Lin-Manuel Miranda and Chef Jose Andres at a special web site that paired Coke with the theatrical piece. In 2019, the company revived its ill-fated New Coke, a beverage once derided as one of the biggest gaffes in marketing history, for a partnership that helped call attention to a new season of Netflix’s “Stranger Things.” The company worked with Netflix for a year and a half to turn the idea into reality and even spent six months sifting through past materials to recreate  New Coke packaging (500,000 cans of the beverage were released as part of the stunt).

Executives at Coke felt the “Hamilton” launch offered an important moment that could help the company bond with consumers. “People around the world are spending more time at home. They are cooking more. They are eating together, watching movies and sort of creating new memories of their own,” says Jaideep Kibe, vice president of marketing for the Coca-Cola brand in North America, in an interview.  “We have always been in places and spaces where our consumers have been, and we have tried to create moments of surprise and delight.”

Advertisers need to think hard before trying to entice a consumer in new video environments, suggests Lang. Unless an alliance “adds value to the consumer or their experience,” he cautions, it can fall flat. “Where we have seen this fall apart is when the brand promotes itself first. Consumers get that right away, and they turn it off.”

Netflix has shown some willingness to work with marketers to call attention to its programs. Subway made a “Green Eggs and Ham” sandwich in 2019 to promote the streamer’s series of the same name. NYX Professional Makeup devised a makeup kit earlier this year to spotlight the series “Chilling Adventures of Sabrina.” If Disney is interested in more of the same, it won’t say so outright. The company declined to make executives available for comment.

Coca-Cola is not the world’s biggest advertiser, but it certainly has become one of its most influential. Over the years, Coke has given the world the famous 1971 “Hilltop” ad, in which dozens of young crooners offered to “buy the world a Coke,” and a series of commercials featuring animated polar bears (who even took to digital in 2012 to offer Super Bowl commentary). The company spent nearly $435.4 million on traditional media advertising in 2019, according to Kantar, a tracker of ad spending.

Some portion of those ad dollars are likely to be used to bolster Coke’s new ideas for streaming, says Hagen.  “We can make a commitment to buy X amount of inventory, or we can work with you to say, ‘What’s the value of this thing? How much exposure can we get?’” He adds: “Yes, it would come from the ‘video budget,’ but at the same time, I don’t have a ‘video budget’ or a ‘digital budget.’ I have a budget that I pull from, and you need to do more of these kinds of things.”

The company is applying similar thinking to streaming-video venues that accept more traditional commercials. Executives keep talking to streaming outlets not about how to put a commercial next to a show or a can of Fanta on set, but about the moments where they might be able to help subscribers have a better experience.  Coke executives have noticed that players on Amazon’s Twitch pay a lot of attention, for example, when a user is made a partner on the gaming service, says Hagen.  And Coca-Cola talked to executives at Hulu about what might be done when viewers decided to pause a show.

“Coca-Cola is the original pause that refreshes,” says Hagen, making a reference to a 1929 Coke slogan that continues to have traction. Coke and Procter & Gamble were charter sponsors in a “pause ad” Hulu developed that puts a translucent logo and ad message on screen when a subscriber decides to stop their streaming action. “We would like to own the pause.”

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