Coke CMO: TV provides 'best ROI across media channels'

Dive Brief:

Coca-Cola CMO Marcos de Quinto said TV advertising is better than digital in terms of ROI "across media channels," as reported by Ad Age.
De Quinto was using admittedly dated data from 2014 to bolster his point. In that year, Coke reported a $2.13 return on each advertising dollar spent compared to just $1.26 for digital.
"We are very seriously trying to transform our company to make it a digital company, but it's not just to put ads in social media," he said at a beverage industry conference. He also showed a slide that said: "Social media is the strategy for those who don't have a true digital strategy."

Dive Insight:

Next year has been pegged by many industry forecasts as the first time digital ad spending will outpace that on TV, and a growing trend toward cord-cutting suggests that favor shown for digital alternatives will only continue to grow on both the marketing and consumer side of things. De Quinto’s statement on a better return on investment from linear TV then highlights how difficult it is to properly manage digital advertising as media options rapidly proliferate and face major headwinds like ad blockers.

Coke is seen by many as a digital-savvy brand that can speak with authority on what is and isn't working in the space, but De Quinto's assertion does come with a major caveat in that he used old data and directly cited social media as a weak point, while mobile overall has become the digital focus of late. However, his comments are indicative that Coke is seriously considering switching up its approach to digital as it tries to search out a strategy that better connects with consumers and provides returns.

The better ROI for TV ads could also point to the ongoing struggles with properly attributing digital ads to real-world actions like purchasing. This fall, Facebook partnered with a number of big-name measurement firms to help marketers better understand the effectiveness of their ads.

Coke's digital challenge might also stem from ad agencies, who've shown a sluggishness in adapting to digital. Main Coke competitor Pepsi recently put its AOR The Barbarian Group under review and then moved all social media marketing in-house while offering up digital marketing activities to third-party bidders.

Any adjustment Coke makes to its advertising planning will have some market impact and influence over other brands, as the company is the 13th-largest ad spender, putting down $3.9 billion in 2015 alone, according to the Ad Age Datachanger.