ADVERTISING: Will Coke’s in-house move create risks?

The thrills and spills of Hollywood have reached the offices of Coca- Cola in Atlanta, Georgia - quite literally. Four years after hiring Hollywood talent firm Creative Artists Agency to do Coke’s creative work, the soft drinks giant has poached three of the CAA staff and effectively developed its own in-house creative agency.

The thrills and spills of Hollywood have reached the offices of Coca-

Cola in Atlanta, Georgia - quite literally. Four years after hiring

Hollywood talent firm Creative Artists Agency to do Coke’s creative

work, the soft drinks giant has poached three of the CAA staff and

effectively developed its own in-house creative agency.



The Los Angeles-based agency, as yet unnamed, is a joint venture between

Coca-Cola and Walt Disney, which is said to have a 10% stake.



The move enables Coca-Cola to keep a successful creative team intact at

a time when there have been some top-level departures at CAA. It also

means the company can draw on Disney’s resources and the sort of

sophisticated animation technology that gave us the cuddly polar bears

in the ‘Always Coca-Cola’ campaign. The benefits for Disney are not so

strong, although it will be able to draw on the creative team’s

expertise for free.



Disney character building



But the Disney link is not surprising; Coke is the exclusive drinks

supplier for Disney’s theme parks and holds the rights to use Disney

characters in its promotions. And the relationship goes further than

that. The new president of Disney is Mike Ovitz, a founder of CAA and

the man behind the original Coke/CAA partnership. Ovitz is said to hold

in high regard the talents of Shelly Hochran, Len Fink and Kack Harrower

- the three CAA staff who have been poached. And one of the driving

forces behind the new deal is thought to be Sergio Zyman, one of Coca-

Cola’s top marketing officials, who is anxious to maintain his own links

with Ovitz.



This will be the only agency producing generic ads for the Coke brands,

although Coca-Cola may still bring in other agencies for what he calls

‘special projects’ - things like the Olympic Games advertising.



The ad world is watching with interest. The move to hire CAA was

surprising in itself. It had been the first time a Hollywood talent

agency, more used to dealing with petulant film stars than soft drinks

brands, was brought in to do major ad campaigns.



The polar bears campaign was considered a huge success, but there have

been claims that CAA’s subsequent work has been less effective. Coca-

Cola denies this. Susan McDermott, company spokesperson in the US says

:‘To date they have made more than 80 ads which are designed to appeal

to a variety of audiences. The polar bears have been the most popular,

but I wouldn’t say any of the others have been a lot less well-

received.’



But what does it all mean for Coke in the UK? Events Stateside may seem

far removed from what is happening here, but any knock-on effects on

market share here would surely be welcomed by Coke, which is currently

taking a hammering from supermarket own-label colas.



Worldwide, the Coke brand grew by 8% in volume terms last year, but in

the UK, the news is not so good. Nielsen figures for July show Coke with

a volume share of 52.%, down from 55.1% last July, and Pepsi with a

19.7% share, down from 20.4%.



Strong creative impulse?



Whatever the outcome, this new ad deal is seen as a bold move. ‘Putting

your creative work in-house suggests you’re going to buy in a couple of

creatives and put them somewhere in your marketing department. But this

is unprecedented. It’s a fairly radical move to decide you have enough

faith in an agency that you will finance starting up your own one,’ says

one account director.



Nigel Marsh, board account director with Abbott Mead Vickers BBDO, which

handles Pepsi’s advertising in the UK, is not convinced that having an

agency solely working on one brand is a healthy move. ‘If all we ever

did was ads for one client it would suggest to me that my creativity may

be getting stale. I would wonder about attracting talent to an agency if

you’re saying to people ‘You’d only ever work on Coke’.’



Others are not so surprised. ‘At the end of the day, it doesn’t really

matter,’ says a source in the soft drinks industry who believes that,

with more freelance contracts and work being spread across lots of

different agencies, the whole structure of the ad industry is changing.



‘The traditional client/agency relationship is no longer the only

blueprint for success.’



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