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Why is Coca-Cola Looking at Apps? Because They're Smart

The Coca-Cola Company have always been one of the best companies in the world when it comes to brand marketing. For years they have been far and away masters of being ahead of the game, constantly forcing the competition to play catch up and making them aggressively challenge them for their market leadership. And, in reality, only Pepsi has been able to be even a challenger but has never been able dominate the market globally the way Coca-Cola has done for many, many, many years. That's why the Reuters story about potential investment in music service Spotify is so interesting, and more importantly, very likely to happen.

For as long as I've been in marketing, and that now spans almost 40 years (I started very, very young) Coca-Cola has done things well ahead of their competition. Their investment in theme parks, led by Disney's properties set the stage for what has to be the text book case study on how to leverage sponsorship and tie it to sales of product via a true psychographic and lifestyle marketing effort. Their investment in sports, festivals and fairs starting with concerts, sports teams, arena pouring and serving rights as well as stheir grass roots upport of local county and state fairs through their local bottling partners as well as corporate led initiatives has made Coca-Cola both a loved brand, and a staple in many homes, and restaurants. Their pouring rights in chain and franchise based businesses like McDonalds, Domino's, Little Ceasers and more has boosted visibility of the brand here and around the world, just as their support of the Olympics every four years (winter, summer).

Now with the rumor of the potential investment in Spotify, Coca-Cola is again showing the signs of brilliant category marketing leadership as it signals a shift in how they market and to whom, because if it's not obvious already to you, mass media, long the bastion where brand marketers spent their ad dollars is dying out --- fast.

Those proof points are Apple's iTunes for music, iTunes for television programs as well as other time shift, location shift services like Hulu and Netflix. Pandora, like Spotify, along with RDIO, MPme and others are moving people from traditional AM and FM radio to what I like to call "music my way." As this music proliferates from the airwaves of commerical radio to the airwaves now delivered by the Internet brand marketers like Coke need to be able to stay relevant to their audiences in ways they never had to before, when impressions, target rating points and such were the factors that led to media buying decisions.

Now, brand marketers need to establish deeper bonds, stronger ties and be more relevant to their customers, and also interact with them in ways that are very different. So by investing in Spotify Coca-Cola will be doing in the music category what Anheuser-Busch did when they became the first and original beer category sponsor of ESPN, back when the network was a fledgling, carrying sports like high school wrestling and women's basketball before it was in vogue. 

The possible investment in Spotify by Coca-Cola is not an aborition, but the harbinger of things to come in marketing. And if I'm right, for Spotify, and their users, things really will go better with Coke.


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