Yes, Virginia. Coca-Cola Still Needs to Advertise.

One of the largest brands in the world is The Coca-Cola Company. Coke spends roughly 3.5 Billion (with a “B”) on advertising worldwide, every year. This equates to about 7% of their gross annual sales.

But why?

There are no short of threads on Reddit, Quora, and Facebook from armchair “marketing experts” who binge watch Mad Men that say “Large brands are wasting money on advertising!” This, of course, is not true.

Marketing, advertising, and brand management are demonstrably important things to maintain because of three primary reasons. Before I detail those reasons, let me say this: Whether your company is large, mid-size, or small, you need to engage in what I call The Commerce Box: Marketing, Advertising, Organizational Development and Brand Management. It doesn’t matter what your company does or who your target audience is, all four of those areas need to be revisited and managed frequently.

So what are the three reasons a global juggernaut like Coke needs to market?

1. COMPETITORS

In Business 101 you learn about a SWOT analysis. The “T” deals with threats and because Coke has competitors like Pepsi, Red Bull, Dr. Pepper, and Fanta, Coke needs to focus on not letting the #2 and #3 soft drink brands topple them. Even though you are a “globally known brand” that doesn’t mean you can take your foot off the gas when it comes to marketing. 

Look at what has happened to Apple recently, even with all of their clean and concise marketing, other factors of their company, namely price management, have caused them to lose global ranking and other companies like OnePlus and Huawei are stepping in to compete and pull Apple customers away from the Silicon Valley giant. 

2. PEOPLE FORGET 

How many times have you seen a commercial on TV and said, “Oh yeah, I forgot about those guys. I love them!” That statement seems a little contradictory. If you love them, why did you forget? Well, it’s simple. There are so many brands and companies, we cannot keep track of everything we like/love. Constantly reminding people of your brand, company, or product is essential. If you don’t advertise, someone else will and they will take your market share. Word of mouth isn’t good enough for growing and scaling businesses.  

Originally launched in Norway in 1996, “URGE” was such a popular soft drink that it was moved to America and rebranded as “SURGE” for the next seven years. Declining sales due to poor marketing campaigns helped move the soft drink out of the marketplace in 2003. However, in 2018, SURGE was released internationally via Burger King and Freestyle machines and Coca-Cola (who owns the brand) was given millions of dollars in free marketing on social media because of the nostalgia factor. Now time will tell if Coke can keep the SURGE brand alive in the digital age. 

3. NEW DEVELOPMENTS REACH NEW MARKETS

Is your company the same today as it was one year ago? What new services have you added? What new features does your product have? When you market new aspects of your business, new audiences can be reached. If you ignored this and simply went on without notifying anyone of your changes, you’ll be quick to go out of business. There is a reason 70% of businesses fail within 10 years and the figure is even worse for small businesses. Capital, poor marketing, and lack of organization are key reasons businesses fail.

This is why we (WCG) put such an emphasis on storytelling. It’s not about having one person be the face of your company. Who runs Coca-Cola? It doesn’t matter (it’s James Quincy in case you're ever on Jeopardy!), but they know how to tell a story through advertising and marketing. They know how to mix nostalgia with innovation. They know how to promote new products and phase out poor-performing ones with ease.

WHAT YOU SHOULD DO?

If you feel like your marketing strategy or your organizational strategy isn’t where it should be, I would recommend reviewing a post I wrote last week about how to audit your business. Then focus on the following categories:

1. Budget for different sections of your business

2. Find platforms you would like to develop your brand on and why

3. What story you can tell about your business

4. Explain WHY you got into the business your in

Anytime we meet with a client, we generally walk through each of those four elements to better understand their story so we can help them market better or manage effectively.

If you’re on Main Street or Wall Street, you need to advertise, market, and stay organized.

Stay competitive, my friends.