Coca-Cola said Wednesday that it has kicked off a global review of its media and creative agency partners.
The review will include creative, production management, shopper and experiential marketing, services that require “significant investment from our brands,” a Coca-Cola spokesperson said.
“We have decided to undergo a complete redesign of our media and creative agency models in an effort to align the strategic, operational and commercial needs of our new, networked organization,” a company spokesperson said. “This will necessitate a full review of our media and creative planning and buying practices, as well as our media and creative agency appointments and commercial relationships around the world.”
Coca-Cola is planning to conduct separate but coordinated reviews for media and creative starting in Q1 of next year, led by marketing and procurement. The company plans to have a “consolidated roster” of agencies in place across both media and creative by Q3 2021 and January 2022, respectively.
Coca-Cola did not name the creative agencies participating in the review, but said that global incumbents on the media side including WPP GroupM’s MediaCom, Interpublic Group’s UM, Publicis Groupe’s Starcom and Dentsu’s Carat will participate.
PwC is advising Coca-Cola on the creative review and MediaSense is supporting on the media side.
The review is beginning as Coca-Cola is on a journey to “fundamentally transform and dramatically improve the effectiveness and efficiency of our marketing investments,” the spokesperson said. The new agency structure will be a “crucial component of our ongoing digital transformation journey to drive our business.”
The agency review is following an October announcement that Coke plans to eliminate 200 brands from its roster, including Tab, Zico and Odwalla, cutting its portfolio in half. This will allow the company to “remain truly consumer-centric” while “focusing on those brands that can be scaled to drive profits for the long-term,” Coca-Cola CEO James Quincey said on the company’s Q3 earnings call.
On that same earnings call, Quincey laid out a global initiative to transform its marketing approach to drive effectiveness, with a goal of cutting costs.
“This is a top priority, and the initial work to-date has validated the opportunity to sustainably reduce our spend by our proven procurement methodologies and other efficiency levers, while maintaining and improving marketing effectiveness,” he said.
He added that there is no savings target for the company but rather it will focus on “improving processes, eliminating duplication and optimizing spend on things like third-party agencies” in order to “increase our effectiveness and be able to fuel reinvestment in our brands.”
Coca-Cola spends $4 billion on measured media globally. The company has struggled during the pandemic, with revenue down 9% in Q3.