Coca-Cola N.America searches for social media monitoring agency

Coca-Cola North America has launched an agency search to help it better monitor its brand online through the nebulous and often treacherous channels of social media.

The winning agency will be responsible for formulating a consistent way of keeping track of what consumers are saying across Twitter, Facebook and other channels about all of Coca-Cola’s brands in North America. It will then report back to the company to yield insights into how to improve or tweak marketing, and determine consumer sentiment about specific products.

The pitch – which internally Coca-Cola is calling a “listening review” – encompasses social-media monitoring across billion-dollar brands such as Coke, Diet Coke, Coke Zero, Sprite, Minute Maid, Powerade, Vitaminwater and Dasani.

Kerry Tressler, a Coca-Cola spokeswoman, said some 20 agencies have been involved in the selection process. She noted the company is looking to select a single agency and expects the decision will be made “fairly quickly.” She also said that roster shop 360i is among the agencies participating in the process.

New York-based 360i is the digital agency of record for a number of Coca-Cola brands, as well as the company’s Freestyle vending machine. Executives familiar with the review said that the agencies are from a variety of disciplines. In a few instances, holding companies are making teams of shops with digital capabilities, such as PR, social media and media planning/buying.

“[Our goal is] to identify a consistent agency and format for conducting social-media monitoring,” Tressler said. “[We want] to yield the most information about what consumers are saying about our brands, so we know what they are looking for.”

Some executives familiar with the new objective said it could resemble Gatorade’s “Mission Control.” When it launched last year, Gatorade devoted an actual space, complete with monitoring screens and tools, to its social-media engagement and feedback cause. That space also served as the subject of a mainstream marketing story.

However, Tressler said she wouldn’t compare Coca-Cola’s effort to what Gatorade has done with Mission Control. Coca-Cola’s effort, she said, is purely about mining information and won’t entail a physical space.

To read the original article in Advertising Age, click here.

Share and Enjoy

Is Facebook Deals’ Demise A Clobbered Competitor Or A Bad Omen For Groupon?

Facebook Deals goes down…How’s Groupon?

Facebook’s announcement of closing its local deals business merely four months after it started has sent mixed signals for the future of the daily discount business. ^[1]

While deal giant Groupon should naturally be happy that it has one less competitor to fight against (a big one too, with over 750 million users!), the decision also raises questions on whether capital-intensive daily deals are a viable option in the long term.

Facebook Deals was competing with other large companies in the daily deal segment such as Google, Groupon and LivingSocial, along with hundreds of other daily deal clones worldwide.

We currently value Facebook at around $45 billion.

Groupon Has One Less Reason to Stay Up at Night

Facebook’s closure of its local deals business is good news for Groupon, which has seen numerous competitors enter into the local deals sector due to extremely low barriers for entry. With over 750 million users, Facebook has a tremendous network and scale effect which it could take advantage of to bring in more subscribers compared to Groupon’s existing subscriber base of over 115 million.

With its core business centered around bringing people together, Facebook clearly overshadowed Groupon in terms of its social media reach, which could have translated into group buying initiatives. Facebook’s exit is also a loss for smaller deal sites such as ReachLocal and Gilt City, which were promoting their deals through Facebook.

But It Also Reflects the Enormous Challenge of Reaching Profitability

The Facebook Deals closure also indicates how even big tech companies with multiple (stable) sources of income are finding local deals to be exceedingly challenging to execute. Promoting and selling discount deals is a highly capital-intensive business, requiring a strong sales force and high marketing costs to acquire and retain both merchants and subscribers.

Given that Facebook is almost a pure technology background, it seems that Facebook is deciding to commit less to running a business model that heavily depends on employing sales reps and handling complaints. Facebook is notoriously hard to get a hold of on the phone for instance if you want to shut your account.

The decision also raises some serious questions over the long-term profitability of deal providers like Groupon whose financials clearly show a trend of rising expenses. ^[2] Groupon has spent over $800 million in marketing and administrative expenses in the first half of 2011, which is roughly 55% of its revenues, and the ultimate operating leverage associated with this business model remains unclear.

See our full analysis for Facebook

Notes:

1. Reuters: Facebook Ending Deals Product After Four-Month Test [↩]
2. Groupon’s S-1/A Filing [↩]

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

Share and Enjoy