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Coca-Cola drinks the social media Kool-Aid

Is it that we just can't admit that social media is not a money maker? Do we not want to face up to reality that social media is increasingly becoming a very expensive way of generating PR that cannot be measured? Isn't it time to just come out and say that brands are being coerced into spending a lot of money to give away free shit (merch, ringtones, screen savers, t-shirts, trips to vegas, cars, etc) because a bunch of social media people with impressive sounding titles have pre-determined incorrectly that the mantra of society is "What's in it for me?"

One would think.

And yet. Here's Coke. As reported on myriad pages including Adage and Smart Planet, all the social media chatter and buzz is adding up to next to nada in sales for Coke.

The Senior Manager Market Ninja Guru, Eric Schmidt, who was quick to defend the findings as only covering buzz and not your usual liking and sharing and watching snackable elements (i.e. content, i.e. tv commercials on youtube) doesn't want to rule it out.

And yet.

...when Coca-Cola put buzz sentiment data into the same analytical framework it uses to evaluate other digital media, Mr. Schmidt said, "We didn't see any statistically significant relationship between our buzz and our short-term sales."

That was at a 95% confidence level, but even stepping back from that high standard, he said showed buzz affecting sales by only 0.01%.

So it doesn't work. And yet Coke is still defending it. On Coke's on site, Wendy Clark, who goes by the most impressive title Senior VP-integrated Marketing Communications and Capabilities--also defended the practice of spending cash to chase buzz. While Ms. Clark is at least rational enough to concede no one particular media buy can do it all, and social media is merely one part of so many other media buys, she starts to lose me as soon as she uses words like "shareable" and "webisodes."

Moreover she loses me entirely with this paragraph:

Reach, engagement, love and value are the markers of success we use for our campaigns. We measure these in a variety of ways, often with our media partners. In beta testing with Facebook, we’ve been able to track closed-loop sales from site exposure to in-store purchase with very promising initial results that are above norms for what we see with other media.

First off--Coke is a business, not a personality contest. Regardless of what is being said here, the measure of any successful business is sales. If you are a global brand, even a 2% drop can make an insane difference. So the idea that if sales of Coke were flatlining everyone would be A-OK as long as buzz was being generated on social media sites is ridiculous.

Secondly, her intonation that in Facebook beta testing, they can track sales from site exposure to actual purchases has me feeling just a wee bit skeptical. Unless you are tracking the five geeks out there who purchased a coke on their smart phones after seeing a Facebook ad, there can only be a few options to explain this:

1. Facebook is making shit up. (That's my vote)
2. They have invented some super secret way to monitor our offline purchases.
3. They are now putting cookies in vending machines.
4.People are ordering a lot of Coke online.
5. People are spending five minutes at the 7-11 register bothering to fill out surveys on how they decided to buy Coke.
6. People are being paid 250 bucks in a focus group to say whatever Coke wants them to say.

Because I fail to see how this can actually be monitored otherwise.

And to her last point that the initial results are promising and above norms of other media-- what media exactly? Is someone buying Coke from exposure on Facebook, or from a friends' chatter, more than they by seeing a cinema ad? Doubt it, since I can buy coke right outside the theater and I can't do that through my iPad. Or are you talking social media on Facebook as opposed to Pinterest?

Sorry. It all seems a bit too vague. I initially thought that brands like Coke and Oreo and Walgreens were being hoodwinked. They had imbibed the Kool-Aid to the point of excess. Seriously, does Coke really believe it sells happiness instead of sugar water that may be a large contributing factor to obesity?

My answer is, no. No they don't. They couldn't. No large corporation is that naive. They are merely staying "on brand."

Coke watched as Pepsi ditched its traditional ad spend in favor of Refreshing everything on in a cause marketing stunt to generate buzz. And then they watched as Pepsi sales dropped. Not only did they drop, but Pepsi dropped to third place behind Coke and Diet Coke.

So yeah, it's all well and good for a brand to implement social media, if it's merely part of an overall communication and they don't ditch their traditional ad spend and if they understand that until someone really monetizes buzz, it's all a buncha nothing. But it seems like an excessive waste to me, and a long way to go for 'happiness.' Especially when the truth is less sugary: At the end of the day, the only people whose happiness you are really concerned about is your shareholders.

By the way, Coke? Last time I checked, happiness still is free. So I don't need to buy your brand or share your buzz or you even see your ads to have it.

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Anonymous Adgrunt's picture
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adhacker's picture

In the advertising world, it's always more powerful to know something than it is to have an opinion. I am posting to confirm that I KNOW this guest author's OPINION is wrong.

Upon expressing this critical opinion on Twitter, I was attacked by both the author and the editor. I have spent my career in Advertising, first as a copywriter and then as an analyst, trying to make people respect the value that creatives bring to the office. Too often, creatives are cast aside as too immature to deal with the more "grown up" parts of advertising, like planning, strategy, analytics, and objectives. The ability for the author and editor to deal with my initial criticism has done more to confirm the stereotype than to fight it.

The fact that this article contains so much clear misinformation has made me doubt the validity of the rest of the posts on AdLand, and it would behoove the editor to consider the content of your guest posts in the future.

To answer the initial question, "Is it that we just can't admit that social media is not a money maker?"

I could draw your attention to dozens of things we KNOW:

1. Social media drives between 30% and 40% of the traffic to websites these days. For many brands, that means it drives 30% to 40% of the revenue. (We KNOW this)
2. Listening on social media allows brands to make better decisions about what customers want, leading to more efficient R&D and communication. (We KNOW this)
3. Facebook Ads drive sales at 8 times ad spend, Facebook Retargeting at 16 times ad spend. (We KNOW this)
4. Touching your customers again and again via social gives legs to your campaign and is much cheaper than buying another TV spot to keep frequency up. (We KNOW this)
5. Social media is literally the only way brands can make "friends," and Word of Mouth drives 90% of all sales. (We KNOW this)

"Do we not want to face up to reality that social media is increasingly becoming a very expensive way of generating PR that cannot be measured?"

Social media is highly measurable. In fact, it's the most measurable media available today. (We KNOW this)

"Coke is a business, not a personality contest. Regardless of what is being said here, the measure of any successful business is sales."

You completely lose me with this paragraph. You're in the advertising business, which means it's your job to put faces and personalities to corporations. Coke is a faceless corporation that makes colored sugar water. But it's also "happiness." Social media works on the "happiness" side, not on the "colored sugar water" side. If you can't connect those dots, quit.

The rest of the article leaves us with a reasonably good explanation of historical events, and I have no complaints about the factual basis of that section of your "rant." I'm just concerned that, moving from complaint to complaint, should you have decided to medicate again halfway through the piece, you might have come up with something substantially better.

Dabitch's picture

You call this being attacked? Really? You called me a dickhead for asking you to comment here. That was uncalled for, and my retort was nothing but noting that.

Edit, in response to the "combatative tweets" comment below, I decided to record the conversation in a storify for posterity.
adhacker's picture

I'm talking of the combative tweets not shown here from both you and the author. In any case, this is the end of it - we can just agree to disagree.

kidsleepy's picture

All well and good. Agree to disagree.

Just remember- this article started by my reporting on what the senior marketing strategists of coke were saying about their own experience, and their own findings, that social media did not generate a short term sales. This wasn't my opinion. It was their findings. It was what they KNOW.


Last year during the election, a USC study found Voters were no more likely than other voters to know an advertised candidate's name after being exposed to an advertisement.

Last year, GM pulled out of Facebook because it wasn't working for them.

Last year an investigative article in the BBC found a significant number of fake profiles generating fake likes, and casting doubt on the efficacy of using such a platform to generate business.

I guess there are a lot of clients out there-- Coke included-- who will agree to disagree with you as well.

Dabitch's picture

Wait, does this make you a dickhead? Because asking for comments under the article is the "dickhead" move? This is what I KNOW, you see, I have learned this on twitter. From you. You open a tweetconvo stating you'll never read this site again (which I'm fairly sure you never did before anyway), and when I inform you there's a comment box, I'm a dickhead. This is how you start your conversation with people. This is your brand dear @smithandteam / adhacker. Who does that?

OT I know, but if one is the digital guru of a 7 person creative ad agency - while simultaneously being a guy looking for work straight after school - one might want to be a little less abrasive when engaging with people in social media. Just saying.

kat smith's picture

I think that it’s only necessary that brands continue to exist on social media, because they really have no choice.

If in the digital age that is where our attention has shifted, brands must follow the audience’s gaze. Whether it results in direct sales is difficult to tell, as it always has been. But people aren’t always entirely aware of what affects them so at least having the suggestion of the product in their mind might subconsciously affect how they feel about it at the point of purchase.

And even they really did buy a sandwich because they saw a picture of one on their twitter feed, they are probably not likely to self-report that because it makes them feel like a dumb sheep and it’s much easier to deny that you’ve been swayed, so that probably makes it even more difficult to measure.

I mean, just reading this article and seeing the Coca-Cola logo had be hurting for a Coke because we are an almost exclusively Pepsi campus. To exit the social sphere is to exist outside of the new reality and brands, like people, if they are to keep up with progress must form identities that will interact in this new space.

It’s interesting because in a way it has humanized brands in a way that we’ve never seen before. To have instant interactivity where you are essentially talking to a picture of a logo is strange but at least contains more room for error, which is what makes it so much more human and therefore real, even despite the extended simulation.

We’re also now working in a space in communications where social capital is perceived as being equivalent to or even more important than real capital, so we’re seeing an incredible shift in power dynamics. Which is why hackers are having an easier time of tearing down, or defacing those powerful entities. In the same vein that a vigilante graffiti artist would deface a billboard they can now deface a presence online, like what happened with the Burger King hack, and reach a much wider audience than in the physical space.

Does it even matter if the brand has thousands of employees and thousands of dollars behind it if its credibility and entire existence on the virtual plane can be torn down in a day, exposing it for what it really is— a symbol of something greater, not the reality of it.

I think it would be much better then for brands to show us the faces behind their operations and humanize themselves further, as you see some of them doing. Joe tweeting for AwesomeCars.com or whatever makes much more sense to the consumer, who isn’t stupid, than AwesomeCars.com trying to be your friend. That way when things go wrong at least you can have some empathy for the person behind the simulation. And you can feel like in some way by interacting with that brand you are benefiting a person rather than a faceless corporate entity.

But this also has frightening consequences for us psychologically as ruining a personal reputation online is easier than ever. How are you supposed to sue someone for libel or defamation, for example, if the rumor is spread is completely anonymously?

No one wants to befriend, or listen to an object talk because that’s a further separation from “the real world” that we don’t really like.

And I could be wrong here because I haven’t had a lot of experience on the business side of things yet, but it seems like the costs of maintaining a social media presence are relatively low compared to other mediums, so why not use it?

But, having said that I do think it’s ridiculous for anyone to claim superiority in social space as a lot of these Social Media Wizards are doing because what you’re essentially saying is “I’m good at being popular” and anyone that’s actually popular doesn’t say that because they would never need to. The popularity would be measured by the amount of people aware of their existence and interacting with their output—which traditional advertising would hope translates into the purchasing of the commodity.

Plus it creates a further erasure of technical skill if we continue to reward people for being talentless and popular, as we do through most reality TV programming. Social media is just taking that one steps further within the new media and allowing us all to interact with the simulation of reality and the culture of narcissism that our society is now fully immersed in.

But if people are re-tweeting the brand message, in a way they are interacting with the output and at least propagating and validating the existence of the brand identity that is necessary for the symbol itself to have any sort of relevance in reality.

It’s the same way that people use a Facebook page as proof of a physical reality, and distrust anyone without this kind of proof. If brands can’t prove that they are popular online, or at least exist online, then they can’t prove that they’ve got the potential to make money and continue to exercise power and influence over real world decision-making processes. Maybe for large companies with established identities it is a waste of money, but for start-ups it seems necessary.

I think that brands are having a hard time building communities because even if 2 or 3 of your friends all like Coke, you don’t really need to talk about all liking Coke. You just drink it. And it’s also hard to build a community around something that has no real dimensions or customers that are not entirely enthusiastic about the product.

In a way, this is good because it means that corporations are going to be held to a greater standard in because everyone has become an independent watchdog and they can get their complaint heard by a wider audience than in the past. And it also means that corporations will have to use social media to further align themselves with things that people actually care about, like other people and causes.

But it’s certainly bad for brands that provide bad services, and I’m not sure if B2B stuff should even bother entering the social space when the audience is so limited.

Phew. That was longer than expected…

kidsleepy's picture

Excellent comment, Kat. Wow. That's indeed a mouthful.

"In a way, this is good because it means that corporations are going to be held to a greater standard in because everyone has become an independent watchdog and they can get their complaint heard by a wider audience than in the past. And it also means that corporations will have to use social media to further align themselves with things that people actually care about, like other people and causes."

Maybe. Or maybe not. Starbucks is a great example. They're awesome at social media, no one would argue that. Or are they? Where's the transparency? I thought you liked us?

For every Awesome cars and Toms, there are plenty of faceless companies not interested in corporate transparency but are merely happy to ride the wave of sameness from a voice-of-the-brand-standpoint. Because let's face it, so far every success story in real time marketing has been from the same voice, regardless of the brand, just as every social media mishap has been of the same voice regardless of the brand. it's the social media voice: on the good side it's approachable yet distant. Warm, but with no identifiable personality behind it, as you said. Talking to a can of coke. On the bad side is the only time it gets interesting: an accidental tweet about being drunk, like they did with Red Cross, or they purposefully step outside etiquette to "hijack" the conversation like Aurora Clothing stores did, during the Aurora shootings. Note, I am not saying these two examples are good social media. Rather, that they are the only times when brands actually start to sound human-- flawed, ugly, real, whatever-- because you see the human behind the keyboard.

The rest of the time it is a Carefully Controlled Brand Message.™

And how much longer before the consumer grows tired of it the same way they've grown tired of all forms of advertising, regardless of media? Remember: We disrupt for a living. People by and large generally do not like us. If they did, there'd be no Tivo.

Right now, I believe there is a bit of self-delusion going on. I'm not sure if it is really coming from the consumer or if it is a generally accepted theory of social media strategists, that somehow the consumer is ever more demanding of transparency and will take their likes and money and social currency elsewhere if they don't get what they want.

And what is it that they really want, exactly?

If suddenly Oreo's popularity goes down they'll start buying graham crackers? If one day Oreo makes a less than stellar real time tweet it's over? That's ridiculous on many levels. But the biggest is perhaps this: our brand choices take years and years of reinforcement, and it either has to take one humongo effort to change our behavior or we have to have our behavior changed over years and years. This has nothing to do with one tweet. Nada. We're all talkin' but we may not be buying. That was the whole point of my article. A point that was validated by the internal marketing team of a company so huge and so established its logo is long known throughout the world.

Also: for every Oreo, there is Apple. Apple does zilch social media and everyone buys their products. But how can this be? I mean we don't know how we should feel about them because they haven't tweeted us? Seriously, how dumb did I feel even writing that last sentence?

For every example there's an opposite. For every rule, there's an exception. Like you, I am not saying don't bother with social media at all.
I'm just saying, don't expect a hundred tweets to increase your sales by 1000% or even 1%, regardless of what a Social Media Guru/Ninja/Pirate tells you. Because A. the measurements are coming from the advertising platforms themselves B. unless they're buying throught he site there's no way to measure it accurately and C. if history tells us anything, the minute advertising stops being interesting (be it on tv, radio, or social media news feeds) the people will tune out. And if you people aren't willing to even hypothesize that last one is possible then they don't know advertising's history.

Dabitch's picture

Here's a recent slideshow by Michael Goldstein that Andra Precupanu ( @AndraPrecupanu ) just showed me which is relevant here.

#0retweets, things I hate about digital advertising from Michael Goldstein

kat smith's picture

Yeah, I didn't actually think about the fact that Apple doesn't do social media. I suppose they never need to because as a company they are constantly innovating and therefore the PR buzz generates itself. They can also rely on it being overwhelmingly positive if they are creating things that people like consuming. I suppose not having the social media aspect does limit the disruption and is therefore a lot less annoying. Timing does seem to be the most important factor.

In a depressed economy people might want to see a big brand (and the biggest on social media) like Walmart offering to hire veterans, and during the Occupy movement a lot of little pizza shops in New York gained some new customers through "word of mouth" social media referrals. So it could translate into sales if done at the right time.

Really, social media should be treated as an extension of the service, not just a talking head, which would then get people focused again on the message. Most people engage on social media with brands to complain, so it's probably useful to provide that outlet. But then again, it is a public outlet whereas a phone call is more controlled.

So I generally try to consider what the service is-- anything that involves a delivery, I think should be on social media to respond immediately to customer inquires. If Jimmy Johns, for example, is supposed to be "Freaky Fast" then it probably should be on Twitter. Or anything that is built around a specific community, and I do think that a lot of brands are self-deluded into thinking that their product unites a community even when it doesn't. I think some women for example would be willing to talk about their favorite fashion retailer online, but I don't think anybody has time to talk to a cinnamon bun except crazies and fatties and since there aren't any of those on the Internet... ah, never mind my mouth is already watering.

I don't think a huge brand like Coke needs the human aspect because people already have their own memories and relationships with that product. They don't really need to establish themselves and their brand voice because it's already recognizable. But there are a few brands that I follow because I want to be updated about events going on at the location, new products they are selling that I might like, or most importantly COUPONS. Most brands are just struggling to stay relevant because they aren't actually doing anything to help their target, and for brands like Coke that pride themselves on being "classics" then maybe it is ultimately counter-productive to the messaging.

kidsleepy's picture

It may very well be counter-productive. I guess it's all case specific. It makes sense for some brands and others it doesn't. I agree that location-based services, or complaint department-style might make sense. but again-- do you want to air your complaints? how many social media fiascos have we heard about involving someone who has a beef with said company and starts a website blah blah blah.

We just need to be rational about the purpose of social media, too. I was on a call with someone the other day who insisted the Arab Spring was fueled by twitter. not only is this historically ignorant (how long had Egyptians been revolting before twitter even existed?) but it's factually inaccurate, too. Twitter was shut down in Egypt. The best way to quell a revolution is to cut the power lines, and that's exactly what happened.

The above slide share presentation makes a great point that the work that resonated culturally and have been long lasting, (where's the beef, 1984, even subservient chicken, etc.) never had one tweet, or retweet, or like. Perhaps it's the caliber of work, perhaps it's the nature of the industry and how it's changed so much. It seems like no one cares about creating a long lasting cultural impact but more so a tiny burst on Monday that we forget by friday.

Whether or not a tweet leads directly to a sale may not even be the best question to ask. Rather the debate should really be this: Is creating a fragmented conversation with short bursts better than having a longer conversation? Are twelve tweets better than a two year campaign? Will ten of my friends saying Me Too with an RT accomplish more than a print ad or spot on youtube? Is one better than the other, or do you need both and in what measure? What is ultimately the best way to reinforce the brand?

Part of the fun will be figuring it out-- and make no mistake--personal opinions aside-- all of us are still figuring it out.

Dabitch's picture

The point about complaints departments on social media, one should have a controlled environment for complaints - and since 1-800 numbers seem to be randomly manned by people in a country as far away from the caller as possible, I suggest proper feedback website areas where live chat/support/action can happen. These ideas and more have been said by "Fanatical support" Rackspace's Social Media Guru guy, Robert Taylor in Brands in social media: Robert Taylor shows "fanatical support" for Rackspace, the interview that I "curated" here.. (laughs heartily, slaps herself on knees, falls over on floor ond LOLs for ten minutes).... Uh.. Right where was I? Specifically here, Robert has some clear wisdom for brands on social media:

Regarding using Twitter as a help desk, I really recommend against this. It's not a personal or as trackable as using a ticketing system, chat or phone call. Also, many customers don't want to engage publicly with problems that can better be discussed in private — imagine "Hey, we're having a problem with securing our site, can you help?" as a tweet. In fact, my goal on Twitter was to reach out to customers and direct them to a phone call or email exchange to discuss and resolve any issues. This had the added benefit of removing "negative mentions" from Twitter — important to the PR folks.