Proof Of The Value Of Sponsorship To Coca-Cola
Posted: 2/10/2010 4:54:08 PM by
Jim Andrews | with 0 comments
Yesterday’s earnings call with analysts to discuss The Coca-Cola Co.’s fourth-quarter 2009 results demonstrates the importance of the company’s global sponsorship platforms. (A transcript of the call can be found here.)
Within the first few minutes of the call, Coke chairman and CEO Muhtar Kent discussed the most important initiatives underway for 2010, with the Vancouver Games and FIFA World Cup claiming center stage:
“Looking forward to 2010 and beyond, we remain intently focused on what critically matters to the long term growth and success of our business. Communicating with our consumers and investing in our brands.
“Let me just quickly walk through you both of these priorities. First, communicating with our consumers. We had wonderful platforms in place to expand our communication and connect with consumers all across the world.
“Our plans include engaging consumers in a way that only Coca-Cola can: through our longstanding partnerships with the world’s most iconic global sporting events, both occurring this year. First, for the Vancouver 2010 Olympic Winter Games, we launched a 12-month brand activation plan in Canada. We also launched a widespread program across 11 countries that include the Olympic torch relay, consumer as well as customer events.
“In addition, our ‘Open the Games’ digital experience has been fully activated in the United States as well as Canada and also in six European nations.
“In addition, we are executing our FIFA 2010 World Cup program. This global football event is the single largest sporting event in the world. It is watched in over 200 countries. Given that the 2010 World Cup will be held on the African continent for the very first time, we’re likely to see a global television audience of well over one billion viewers for the final match alone. In other words, ten times the size of the Super Bowl.
“So it shouldn’t come as a surprise that our FIFA 2010 activation will be our most comprehensive campaign ever. It will include global commercials, online programs, commemorative packaging, and a 225-day World Cup trophy tour touching 86 countries.”
In response to a question from Deutsche Bank’s Marc Greenberg about “what kind of system boost do you think you might see both in local markets and overall as a consequence of World Cup and Olympics?” Kent had this to say:
“I think it’s fair to say that the World Cup property really does generate a tremendous amount of excitement across the world, particularly in Europe and Latin America. But this time, of course, Africa is completely engulfed by it as well…The last time we had the World Cup we saw some very encouraging results in our business with both very small, medium and large customers across the whole word, particularly in Europe and Latin America. And this time I think certainly that we will see tremendous excitement in addition to those continents from also Africa.”
Also interesting was the response from Coke CFO Gary Fayard to a question from Christine Farkas of Bank of America Merrill Lynch about the fact that marketing spending increased in the fourth quarter and whether that increase was related to the Games and World Cup.
His answer was that the company spent more on marketing because business was better, which should be an indication that other company’s budgets will increase as their sales and results improve in a post-recessionary economy.
“We saw our business start improving in the fourth quarter obviously with the five percent volume growth…And as part of that we saw that we could start improving our marketing and lifting it up and increase the spend in the fourth quarter. Remember the way we do marketing normally, it's all on a curve, so it's spread across the full year, but when you get to the fourth quarter you catch it all up and we started spending more and it all caught up in the fourth quarter…
“It was not so much directly (tied) to the Olympics and…World Cup in the fourth quarter, particularly Olympics because we had those already planned and were implementing those programs as planned. So this was just we saw the opportunity to increase, we did increase somewhat from where we had been full year as we saw our business actually doing very well in the fourth quarter.”
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Filed under: beverage, international, olympics, soft drink, sponsorship ROI, activation