The Genius of And

Joseph V. Tripodi,  Executive Vice President and Chief Marketing and Commercial Officer, The Coca-Cola Company
"The Genius of And"
Association of National Advertisers
Masters of Marketing
Orlando, FL
October 14, 2010

As prepared for delivery

Happy Birthday ANA... 100 years! Of course, the organization is celebrating 100 years but was anyone in the room today around back in 1910?

No, I wasn't either. But, I'll tell you what was: Coca-Cola!

A lot has changed for Coca-Cola in 100 years. So, let's take a look - at then... and now.

Then... and Now

In 1910, Coca Cola operated only in five countries. That was then. This is now. Today we're in 206 countries. The only organization in the world that can claim more countries is FIFA.

Then...we had one brand. Now, we've got more than 500. I should add that all of these brands have added great complexity into our business system and many new challenges.

How was our product sold then? One at a time, for the most part, as a fountain beverage. And today, we have the largest distribution system in the world. We have 13 million vending machines and coolers around the world - 989,000 vending machines in Japan alone.

Our business system employs nearly one million people and is the largest private employer on the continent of Africa.

What was the value of the brand? Then, Asa Candler sold the U.S. bottling rights for Coca-Cola for one dollar. And now, the value of the brand is estimated at over $70 billion.

Then...how much were we selling? Well, just a trickle compared to now, at 1.6 billion servings per day. More than 300,000 servings since I started this part of my presentation.

One hundred years ago, this was the Coca-Cola logo. In fact, it goes all the way back to 1886. Amazingly, here is the Coca-Cola logo today! As we prepare to celebrate the 125th Anniversary of Coca-Cola next year, much can be said about consistency.

Of course, that highlights a conflict we all face. We all are seeing tremendous change and new demands on our businesses. We have to evolve yet we also must remain true to our brand.

Like so many of us in the room today, we operate in a paradoxical world. We face many of these contradictions that seem like polar opposites but which are actually fully complementary. We must approach them through, "The Genius of the AND."

For example...

Growth... and sustainability. We live in a world where we must deliver aggressive growth, soaring growth. Yet we must do so in a sustainable way.

Growth for Coca-Cola? As part of our 2020 vision we have committed to double our business by 2020, going from 1.6 billion servings a day to 3.2 billion servings a day.

More than three billion servings a day. Just think of the implications that has on the business system I just showed you - from a people perspective to impacts on equipment, trucks, coolers and our supply chain. It's an enormous undertaking. But while growth and sustainability can seem contradictory, they actually can go together perfectly.

Again, it is "The Genius of the AND."

Global... and local. We must be global on one hand - leveraging our scale - but then be locally relevant on the other. How do you live in both of those places?

Choice... and simplification. We have to make choice available; yet, our world demands simplification.

I've talked many times about the notion of margin dilutive complexity. Like many of us here, we have such great complexity in our business systems that we have to look hard at SKU and brand rationalization, suppliers and supply chain rationalization, even agency rationalization.

Storytelling... and scale. We must tell great stories. Powerful, emotional stories. But at the same time, we must be able to scale those stories around the world.

Modern... and traditional. We find ourselves operating in a very modern world; but, we must keep our footing on the traditional side.

Our customers and retailers are changing dramatically. The modern trade is the one that is growing the most dramatically. Yet, in many countries, a huge portion of our business is in traditional trade - including small "mom-and-pops." They're going to be around for a long time. It's the nature of how merchants evolve. But it creates an inherent complexity for us.

Home... and away. We must make sure we're relevant in the home... and, at the same time, away from home. I think this cries out loudly for consistency in the brand and the brand experience.

Timeless... and relevant. What's timeless? And also at the same time, relevant? Even cool and contemporary?

Inspirational... and operational . We have to be inspirational. And, at the same time in our businesses, ruthlessly focused on operational capabilities.

Love... and value. And, among the most significant contradictions - is love and value.

Now, this means different things to different people, and to different beings. This is my dog Chester. Now for Chester, love is when I pet him - he really loves that. But he finds his real value is when I provide the big dog bone!

So, love...and value.

Brand Love... and Brand Value.

For today, that's the AND I'm going to address. I'm going to address the inevitable contradiction of Brand Love and Brand Value. How do you deliver against both?

You may have noticed that in my title, I am the Chief Marketing Officer and I'm also the Chief Commercial Officer. In our world today, those must join together. Where the traditional Marketing side has been about delivering Brand Love, the Commercial side is focused on delivering Brand Value.

As a result, my role at The Coca-Cola Company is not about spending time making television commercials. My role is to be the champion for growth. It is to drive culture change in the organization. And, it is to make sure we have the capabilities to sustain the enterprise over the long term.

So, the real genius of AND today is the fusion of Brand Love and Brand Value. That's where it all happens. It's where inspirational marketing meets operational marketing.

With consumers, we've been building Brand Love for generations. And on the commercial side, it is through our customers, our bottlers, our partners and our suppliers that we have delivered Brand Value. The genius is the fusion of the two - Brand Love and Brand Value.

It's how we're marketing at Coca-Cola. It's not a destination; we're not there yet. We're on a continuous journey.

Along that journey, we're delivering Brand Love and Brand Value by refreshing the way we think about five big "difference makers," represented by these five bubbles: Culture, Innovation, Engagement, Collaboration, and Profit.

These are big bubbles. These are the big difference makers that surround Brand Love and Brand Value. They're interdependent and interconnected. And that's critical for us to understand. We must address all five.

Culture

The first big bubble - or difference maker - is Culture.

We all know people are skeptical, even cynical. They're tired of being marketed at. People crave relevance. They crave experiences. They want something different. They want to be entertained. We're living in an ADD society with very short attention spans, increasing celebrity worship and diminishing cultural standards.

But, however we view our society, we find that people actually share many common purposes and emotions. People share common values, common wants, needs and desires. They want security. They want happiness. They want friendship. They want good jobs and income. They, of course, have basic human needs like food, water, shelter. And, they have an innate desire to share.

Now, on the outside, there seem to be far more differences in people than there are similarities. But, that's the outside - like the frosting on the cake. When you get into the cake, you find these common emotions, these common desires and interests. When you cut the cake, you begin to find that people are more and more alike.

As the world is shrinking, with the Internet as "the great democratizer," we start seeing consistent ways we can talk to people who are living more in what I call, global tribes.

There is a global youth culture. There is a global culture of urban warriors. There is a culture of high net worth individuals. Of course, when I was on this stage two years ago, we were going through financial meltdown. Amazingly, the world survived. We're still here. And the high net worth people, while their net worth is a little lower, still share a lot of common values all around the world. They respond in very similar ways.

There is a huge LOHAS culture, where people highly value lifestyles of health and sustainability. These consumers feel it's so important to understand not just what you make, but also the character of your company.

As a marketing community, this is where it gets most interesting. Because we have to remain relevant. Think about it from a Coca-Cola perspective: How do you remain the number one brand in the world while you've been around for 125 years? You have to stay on the leading, and bleeding, edge of cultural relevancy.

We've all done a pretty good job - and Coca-Cola, particularly - in leveraging consumer passion points. Passion points including music, sports and entertainment. But the newest passion points involve the concerns of the LOHAS consumers, particularly around social consciousness.

So a key challenge for marketers becomes: How do we associate ourselves with passion points involving social issues in ways that are creative, interesting and authentic? How do we avoid trying to force our brand into places that don't make sense?

At The Coca-Cola Company, we do so through an approach we call Live Positively, which I highlighted in my presentation here two years ago.

One of the seven dimensions of Live Positively involves sustainable packaging. And today, I'm going to show you an example of how we're working to engage with consumers in a very different way about recycling. Candidly, sometimes in big global companies, messages can get "dumbed down," where everything becomes very corporate, very traditional, very conservative.

What you're going to see today is a film we're launching this week through You Tube and on the Web. It's all about getting younger people interested and engaged in recycling and doing so in a creative, relevant way. Interestingly, this film was created in-house by a group in London that we call the Coca-Cola Content Factory.

So here's the premiere of "Hand Revolt."

<< Video Segment: Hand Revolt >>

Again, we're trying to touch on a social issue that really connects with people - particularly young people - in an interesting and creative way.

I would like to mention two companies that I think are doing a great job in sustainability. One, with which we partner on recycling, is called Recycle Bank. I think they've cracked the code on a model for stimulating recycling. Another is Mother Nature Network, which offers a very interesting platform around sustainability.

Innovation

On to our next big bubble, or difference maker: How we're refreshing Innovation.

We know there are dramatic changes all around us -- I don't have to repeat that. And, we know that if we don't like change we'll probably like irrelevance even less.

At Coca-Cola, we define innovation across four broad buckets. Products, packaging - including PlantBottle which we launched in the U.S. earlier this year - equipment, such as interactive vending, and, consumer engagement. Innovation in consumer engagement can work in many ways - it can be experiential but also in design, such as our aluminum bottle.

On the experiential side, consider World of Coca-Cola in Atlanta, where we have one million people visiting every year - three and a half million since our new facility opened three years ago. And, recently at the Shanghai Expo, where we were one of very few companies with major presence, we had three million through our expo in a six-month period. We believe that type of experiential branding is worth more to us than simple traditional marketing.

Of course, when you innovate you have to take risks and you have to be prepared to fail. Failure is great. We're not advancing the enterprise if we're not failing. But, we shouldn't fail at the same thing in 20 countries. That's why it's important for us to collapse the learning loop - to move knowledge around our business system as fast as possible - so we can continue to innovate across all these different dimensions.

Let's go deeper on one area of innovation: Equipment. What you're seeing is a machine we call Freestyle. We think Freestyle will absolutely revolutionize our fountain business. People love it. Customers love it because it increases traffic and it increases sales. But instead of hearing me talk about it, let's hear what one of our consumers said about it in a video segment we discovered on You Tube.

<< Video Segment: Consumer YouTube Video Demonstration - Freestyle >>

Another example I want to share with you is how we're driving innovation in consumer engagement. It's how we're leveraging emerging technologies and creating new technologies. The Coca-Cola Digital Network just launched late last year, and it provides us with a very robust approach for precision marketing. We believe the foundation of marketing in the future is more and more about precision and one-to-one marketing.

Watch as these outdoor signs change in the background according to the time of day. We've started fairly small, converting traditional out-of-home into digital - over 50 now and we're ramping that up. But it's far more strategic and powerful than a billboard "play." This will enable us to deliver content in a very contextually relevant way.

This network provides the potential for us to deliver content and messaging to any screen, at anytime, anywhere in the world. We've built that capability and built the black box. It can go on in-store television networks at grocery stores, to digital vendors that we may own, to billboards, to taxi tops - really, anywhere. Ultimately, the killer app is to the mobile phone.

When you're pushing the envelope on new innovation, think big, but start small. Learn; and scale fast. That's our philosophy with the Coca-Cola Digital Network.

Engagement

The third bubble or difference maker is Engagement.

As we refresh engagement, we have to find ways to take marketing and scale it, but without "sameness." That includes new levels of engagement with our customers and commercial partners, as well as with people who are our consumers.

We are living in an increasingly wired world and people are attaching to our brands in that world through pop culture. I'm going to share two examples of how we're meeting them there.

The first, we call, "Happiness Machine." As part of our Open Happiness campaign on brand Coca-Cola, we placed a special machine that delivered small moments of happiness to students on the St. John's University campus in New York. We captured those moments on video and released them on You Tube. Let's take a look.

<< Video Segment: Happiness Machine >>

With its online popularity, including millions of views, we decided to adapt it into a 60-second television advertisement.

And, another example of engagement I'll share is our Expedition 206 project. This is an area where we had to become very comfortable taking risks. We allowed consumers to select three Coca-Cola Ambassadors to travel the world - visiting all 206 countries where Coca-Cola is present, in just one year's time - and drive the online conversation of what they discover about what makes people happy. We just watch as they handle all the blogging, all the content, all the videos. It's very real and very authentic.

In this video segment, you'll see an overview of the program, then a greeting from the Ambassadors to you, just recorded this week.

<< Video Segment: Expedition 206 >>

They were in Tajikistan and they were on their way to Nigeria when they recorded that clip. You have to imagine, they are probably thinking, "Gee, this sounded like an awfully good idea when I signed up, ten months ago." I tell you they've been great - they've given us unbelievable content and it's been a great way to integrate our brand into all types of social media.

Collaboration

The next big bubble or difference maker for us is how we refine collaboration with an entire universe of constituents - customers, suppliers, governments, NGOs, creative partners. And, with shoppers and consumers. Beyond dialog, beyond conversations, we are moving into deeper levels of collaboration. A clear example can be seen in our continuous online presence.

On Facebook, with its currently 515 million members. The number of Coca-Cola fans on Facebook has just passed the 14 million mark. Among the reasons for that success: the emotional, vested interests people have in the community and with Coca-Cola.

Twitter is another great example of enhancing collaboration and integration in our marketing and communications. It's very clear to us that we must insert ourselves into the conversation that's taking place, particularly when finding others who are randomly writing things about our company or our products that just aren't true. You must be part of that conversation to make sure that when your company is under siege - when your category is under siege - you are there to help set the record straight and tell the positive side to your story.

Another way to look at collaboration is by considering the level of co-creation we're seeing with our consumers. Taking a look just at YouTube, you'll see about 146 million views of content related to Coca-Cola. What's interesting is that around 26 million of them were impressions created by us; and, the other 120 million were expressions created by others. We know that consumers own our brands - this highlights that even more.

My perspective is that we need to get out of the business of obsessing over and counting impressions and move our focus more toward expressions. We all know that at the top of that familiar brand pyramid - even above loyalty - is advocacy. When you have people who are advocates for your brand and what you do, that helps take your business and your brand to the next level.

As we increase our level of collaboration and co-creation with others, we, as marketers, must be comfortable going outside our normal universe. It has become quite obvious to us at Coca-Cola that we must be able to manage the whole dynamic around content sourcing and management by looking outside our traditional channels.

Consider our work with a company called MoFilm. MoFilm is basically a facilitator between a client or a brand that has creative needs and a massive number of people who comprise a universe of creative collaborators - people who have great ideas. I'm going to show you a film that was made by two film students in Los Angeles, using their own money. They submitted this film about Coke Zero and won the MoFilm competition at the Cannes Lions festival earlier this year. Our brief for the competition was simply, "Coke Zero is all about possibilities."

<< Video Segment: Coke Zero MoFilm Cannes Lions competition winner >>

A cute little story, well told by creative people completely outside the universe in which we normally operate.

Profit

The final bubble - the final big difference maker I want to address - is profit. It obviously includes financial profit, for sure, but also focused on collaborative profit that brings value to all involved with Coca-Cola.

I'm going to show you a spectacular example of just how that works. An effort that delivered not only tremendous financial profit, which we recognized publicly in our second quarter earnings, but went way, way beyond.

It is the Coca-Cola FIFA World Cup 2010 global campaign. It left a lasting legacy in Africa - not just South Africa but across the continent. It touched communities all over the world, particularly through our World Cup Trophy Tour. It engaged customers, including our largest customer, Walmart, in every country where Walmart operates. It engaged our bottlers, suppliers, partners such as Electronic Arts and You Tube; and, above all, it paid off in both Brand Love and Brand Value for Coca-Cola. It's the biggest integrated marketing campaign that Coca-Cola has ever executed; and, it may well be the biggest by any company, with 160 countries participating in this campaign.

<< Video Segment: Coca-Cola FIFA World Cup 2010 Campaign Summary >>

Again, it was a terrific program for Coca-Cola and all involved.

The FIFA World Cup 2010 campaign also is the best example to date of Coca-Cola embracing a philosophy we're calling "Liquid and Linked." Liquid, in that the content flows everywhere. Linked, in that every element was linked by a consistent core creative idea - in this case, this notion of celebration. It was linked through the campaign anthem, "Waving Flag." It was linked by a visual identity system that went around the world. And we think that it represented the ultimate example of when scale meets storytelling.

The FIFA World Cup 2010 campaign undeniably delivered both Brand Love and Brand Value.

We believe strongly that when you are focused on Brand Love and Brand Value, you gain wide latitude and permission to engage on a variety of platforms with all of our constituencies. And that's very, very important.

All of the examples I've share today are grounded in the way we're rethinking and refreshing our business to deliver Brand Love and Brand Value - through Culture, Innovation, Engagement, Collaboration and Profit.

You may have noticed that in all the examples I shared, there was not one conventional television ad created by our traditional agencies. I did so to make a point - that our world is evolving and, at Coca-Cola, we're evolving with it. We always feel a great partnership with our agency roster. But we also feel that there are great sources of ideas anywhere in the world and we need to tap into them.

As I said earlier, "bubbles" are the oxygen of our business. These bubbles I've covered today represent the big "difference makers" that are moving us ahead. They are interconnected and interdependent. And they are critically important in everything we do. Bubbles are important, but they're very fragile. They have to be nurtured.

For Coca-Cola, these bubbles are timeless. They represent how we will double our business over the next decade. And how we'll be here for the next 100 years.

So in 2110, at the 200th Anniversary of ANA, I know that those who follow us onto this stage still will be talking about the timeless nature of Coca-Cola. They still will be talking about how Coca-Cola is loved around the world. And how Coca-Cola continues to generate tremendous value across the globe.

They still will be talking about Brand Love & Brand Value. "The Genius of the AND."