In a move that will shock the advertising industry, Coca-Cola Co. has turned over sizable responsibility for its 1993 marketing campaign to Hollywood's Creative Artists Agency.
The new agreement calls for CAA to develop creative concepts and produce advertising for Coke in partnership with McCann-Erickson, Coke's New York ad agency. The Atlanta-based soft drink giant said in a letter to its marketing managers on Thursday that it will "fuse" McCann's worldwide marketing experience with CAA's "creative resources."
The deal is said to give CAA, one of Hollywood's leading talent agencies, broad authority over every facet of advertising for the Coca-Cola Classic brand in the U.S. and Coca-Cola abroad. Sources said that CAA may ultimately wield more creative clout over that marketing plan than McCann, which would primarily distribute the ads throughout the world.
The move also suggests that Hollywood, which has long considered itself America's trendsetter, will begin to exert a greater influence over advertising.
Senior managers at the Atlanta-based soft-drink giant were said to be highly impressed with a cross-media marketing campaign presented two weeks ago by a team of four CAA representatives, including Chairman Michael Ovitz.
CAA's presentation was said to include a series of television, print and radio proposals, as well as a new theme song. The campaign does not draw from CAA's celebrity client roster, but does call for the involvement of big-name directors.
McCann Erickson had no comment on Coke's announcement.
CAA first entered into a consulting deal with Coke last year. But until Thursday the exact nature of the relationship was unclear.
While Madison Avenue has recoiled at the notion of Hollywood treading on its turf, top advertising and marketing executives say the triangular relationship among Coke, advertising agencies and Hollywood--if successful--will likely pave the way for others to attempt similar deals.
Apple Computer has already had discussions with CAA. And marketing consultants say major companies such as Burger King, McDonald's, Nike and Reebok--which rely heavily upon attracting young consumers--are likely candidates to go the same route.
"A lot of ad agencies have lost the ability to sell their creativity to their clients," said Gerald Celente, founder of the Trends Research Institute. "Many agencies are simply not in a position to be on the leading edge of change."
Coke's national advertising budget in 1991 was $367.4 million, but some analysts have unfavorably compared its ads to those of its archrival, Pepsi.
The Wall Street Journal reported last week that Coca-Cola may scrap its global slogan, "Can't Beat the Real Thing," in favor of "Always Coke."
Coke's stock has slumped from $45 in the spring to $37.625. The firm warned in September that international sales would be flat in the third quarter, but because of price increases and cost cutting, Coke said its earnings still will rise 18% to 20%.