by : Business, July 2012

Soda Brands Tap Music Well

Soda Brands Tap Music Well

Music has become the centerpiece for global marketing campaigns involving Coca-Cola and Pepsi, two of the most valuable brands in the world today1. Both companies work to protect their image and seek to recruit new and younger customers. Music is their go-between.

Indeed, on April 18th, a few months after Spotify signed its deal with Facebook (MBJ, Oct. 2011), the streaming service announced an international partnership with Coca-Cola.  A month later, Pepsi announced its “Live for Now Music” campaign and a yearlong deal with Twitter.

Spotify and Twitter wish to grow their user base and benefit from the connection with music.  But there is an added sense of urgency in the soft drinks market.

Many consumers seem concerned about soda-related health risks. For instance, in the latest anti-obesity campaign effort targeting sugary drinks, New York City’s Mayor, Michael Bloomberg, proposed a ban on sales of large-size sweetened beverages in many of NYC’s venues, including theaters, bodegas and restaurants. Coca-Cola and Pepsi are pushing new advertising alliances at a time when young music fans at Madison Square Garden might be unable to purchase a large Pepsi at a Pepsi-sponsored concert.2

Pepsi – Twitter

Brands, online services, and music professionals are reacting to shifting consumer habits, and finding ways to work together.  The Pepsi-Twitter partnership makes use of several mutual promotion strategies including a concert series, weekly music-news videos, and free music downloads.

The Pepsi pop-up concert series will stream between three and twelve shows live on Twitter spontaneously throughout the summer and fall.  Shows will be announced no earlier than two weeks in advance and subsequently be available “on demand.”  Twitter’s @Pepsi followers will be invited to post song requests and influence artists’ set lists for each concert.   Pepsi has not yet revealed which artists it plans to collaborate with, citing value in the element of surprise.3

Pepsi and Twitter will also post a short music-news video every Wednesday, analyzing and re-capping that week’s top trending music-related tweets by American users.  The video commentary is scheduled to last fifty-two weeks and has already covered Katy Perry’s Fleet Week concert as well as performances by Jay-Z, Kanye West, and a special appearance by Johnny Depp.  @Pepsi will also tweet weekly about new music that aligns with the company’s “Live For Now” campaign.

Furthermore, Pepsi and Twitter have also teamed up with the Amazon.com MP3 Store to offer free music downloads to Twitter users who use hashtags related to #PepsiMusicNOW in their tweets.  Pepsi also struck a partnership with Viacom in order to implement a program using the Twitter handles of Comedy Central, MTV, VH1 and CMT.

Twitter users who post images with “Live For Now Music” related hashtags enter to win a variety of music-related prizes.  For example, users who tweet images with the hashtag, #playnow could be featured on VH1’s morning show, “Top 20 Countdown”.  Users who tweet images with the hashtag, #mtvnow enter for a chance to become a “Pepsi Now” correspondent at the MTV Video Music Awards in September.  Winners of the Comedy Central hashtag challenge (#comedynow) will be featured on the Colbert Report and attend the filming of the Colbert Summer Music series in August.

This is not the first time that Twitter has looked towards music to widen their user base.  The “Live for Now Music” campaign is the second partnership to be secured by Joel Lunenfeld, who runs the company’s brand-strategy group and joined the Twitter global marketing team in July, 2011.  Lunenfeld was previously CEO of Moxi Interactive, an Atlanta-based digital agency whose clients include Coca-Cola, L’Oreal and Verizon.  His first campaign for Twitter was with American Express during the SXSW festival in March 2012.  AmEx created a buzz by sponsoring a Jay-Z concert and streamed a free Jay-Z “Amex Sync Show” online for cardholders as an effort to entice members to connect their accounts to Twitter.4

Coke-Spotify

Music will be at the center of Coca-Cola’s marketing campaign, “Year Of Music” – an effort to reach out to teenagers, beginning in 2013.  Joe Belliotti, Coca-Cola’s director of global entertainment marketing, told reporters that reaching younger audiences is important because the teenage demographic is “projected to represent one-third of the global population by 2020. The U.S., China, India, Indonesia, Nigeria and Pakistan are expected to have half of the teen-age population by then.”5 The beverage company has identified music as a vehicle powerful enough to reach potential future customers and has partnered directly with Spotify.

Spotify can help Coca-Cola connect to a younger generation but can also help in other ways. Coca-Cola is leveraging Spotify’s API (Application Programing Interface) to create various, new applications.  In April, the companies co-hosted a “hack den” event in New York City where independent developers competed to create apps.  The winning team, named “London Calling,” is reported to be working on a customized version of the “Spotify Play Button” for Coca-Cola’s Facebook page, which has over forty million fans.6 The Spotify Play Button launched on April 11th and is a music player that can easily be embedded into blogs and websites.  It is noteworthy because the player draws from the Spotify catalogue legally and compensates copyright holders for each play, regardless of where it is located.

London Calling is also said to be building apps for to the upcoming Olympics.  Coca-Cola recently hired Mark Ronson, a British music producer and DJ who is famous for his work with singer Amy Winehouse, to compose this year’s official Olympic anthem, “Anywhere In The World.” The dance track, featuring singer Katy B., is constructed using audio samples gathered from various Olympic athletes’ training sessions.  The sound of an archer’s arrow hitting a target acts as a bass drum.  A gymnast landing on a springboard sounds like a snare drum.  Coca-Cola launched an interactive website and app called, Move To The Beat, which allows users to follow Ronson’s musical journey and also remix the song by mixing and matching two categories: a music genre, such as hip-hop and a sport, such as table tennis.  From a mobile device, the user can use physical movements and gestures to further refine the musical mix.7

Coca-Cola is not the only entity that stands to gain from the partnership.  The deal is equally as valuable to Spotify for a several reasons.  Securing sizeable ad-generated revenue from Coca-Cola could push Spotify one step closer to finding a fiscally stable business model as the company negotiates expensive music licenses within different countries’ disparate music systems.  Spotify, along with many online businesses such as Pandora or even Facebook have fallen short in convincing the public that they can generate stable and self-sustaining income.

Large-scale brand partnerships, like this one, present one type of solution.  In addition to needing money, Spotify needs help expanding internationally.  Its footprint is currently limited to only the U.S. and parts of Europe.  So in return for providing Coca-Cola with access to young music fans, Spotify will use Coca-Cola’s global presence to expand worldwide in 2013. Promotional strategies might include TV and billboard placements, the printing of Spotify access codes on Coca-Cola bottles and cans, or advertising in McDonald’s restaurants. Spotify will also benefit from the non-exclusive terms of the agreement and has already accepted advertising from competing corporations.

Overview

The partnerships between Pepsi, Twitter, Coca-Cola and Spotify place these companies in powerful curating positions amidst the music industry with the authority to choose which artists make headlines. Online businesses like Spotify and Twitter are acting as the new filters for upcoming musicians.  Brands are looking to them to find out what, or who, the public likes; the brands then have the power to make artists into stars.  In this respect, such services replace traditional record labels as the middlemen between musicians and brands.

These partnerships also confirm the tremendous value of music as content around which moneymaking business models are constructed.  Twitter’s vice president for global brand strategy, Joel Lunenfeld, said that forty-nine percent of Twitter’s users follow at least one musician on the website.  “We’re looking for those big content areas that people are talking about and retweeting,” explained Lunenfeld.8

Brands are recognizing and embracing the new ways in which listeners access music and are finding ways to capitalize. In turn, musicians want exposure for their music. As Daniel Ek, the CEO of Spotify, famously said:  “We want music to be like water, everywhere; but when you think about it, we want music to be like Coke, which really is everywhere.”9 The music industry can indeed learn a marketing lesson or two from Coke and jump on its bandwagon—and not least because that company has protected the returned value of its product so much more effectively.

By Emilie Bogrand



1 “Spotify and Coca-Cola Partner to Share Music with the World,” Press Release, The Coca-Cola Company, accessed June 25, 2012 http://www.thecoca-colacompany.com/dynamic/press_center/2012/04/spotify-and-coca-cola-partnership.html.

2 Grynbaum, Michael M. “Soda Industry Maps Strategy to Defeat Bloomberg Plan to Ban Super-Size Drinks,” The New York Times, June 1, 2012, http://www.nytimes.com/2012/06/02/nyregion/soda-industry-maps-campaign-to-defeat-bloomberg-plan.html?_r=1.

3 Vega, Tanzina. “Pepsi and Twitter Announce Partnership on Ad Campaign,” The New York Times, May 30, 2012, http://mediadecoder.blogs.nytimes.com/2012/05/30/pepsi-and-twitter-announce-partnership-on-ad-campaign/.

4 Patel, Kunar. “Twitter Users Grab $1.3 Million in AmEx Coupons for Burgers, Gear,” Advertising Age, March 15, 2012, http://adage.com/article/digital/twitter-users-grab-1-3m-amex-coupons-burgers-gear/233325/.

5 Patel, Kunar. “Coca-Cola and Spotify Partner in Global Deal,” Advertising Age, April 18, 2012, http://adage.com/article/digital/coca-cola-spotify-partner-global-deal/234173/.

6 Van Buskirk, Eliot. “Coke Wants To Buy The World A Spotify,” The EchoNest, April 18, 2012, http://evolver.fm/2012/04/18/coke-wants-to-buy-the-world-a-spotify/.

7 “Create My Beat: Move To The Beat of London 2012,” The Coca-Cola Company, accessed June 25, 2012, http://www.coca-cola.com/theolympics/en-US/CreateMyBeat.

8 Vega, Tanzina. “Pepsi and Twitter Announce Partnership on Ad Campaign,” The New York Times.

9 Patel, Kunar. “Coca-Cola and Spotify Partner in Global Deal,” Advertising Age.

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