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Coca-Cola Sets Up VOD Experiment

Aug 30, 2004  •  Post A Comment

With the pressure on marketers to find ways for their brands to live in a time-shifted world, Coca-Cola is planning an aggressive slate of experimentation on the video-on-demand platform this fall with the nation’s top three cable operators.

The iconic soft drink brand is working with Comcast, Time Warner Cable and Cox to create branded VOD content and to study consumer behavior as it relates to VOD, said David Raines, VP, integrated communication, for Coca-Cola North America. Details are still being ironed out, but the content will likely be entertainment- or sports-related and will go well beyond putting a 30-second spot into existing programming, Mr. Raines said.

“We are very interested in [VOD] … and how to create a branded association,” he said. “There is this opportunity for something really different-to do brand building, a convergence of marketing, content and distribution. We are looking for content and distribution platforms.”

Coca-Cola’s expected presence in the VOD space this fall is not the brand’s first entrance in the on-demand world, but it could be its biggest splash. In 2002 Coca-Cola worked with Cox’s FreeZone ad-supported VOD experiment in San Diego that offered a host of long-format ads and sponsorships, including a Diet Coke-branded 13-part series called “What’s Your 20?” that told the story of a young production assistant.

Expectations are still relatively unformed at this point for this next generation of VOD content from Coca-Cola, since little is known about how consumers are using VOD and even less is clear about how they will interact with either branded content or more traditional advertising in the on-demand space. Coca-Cola’s goal is to begin to get those answers. “We want to learn how to leverage this new technology to have uniquely branded content available to the consumer. What I am looking to create is affinity for my brand,” Mr. Raines said. “We will be creating unique content for that platform.”

Mr. Raines said he expects to procure measurement data from the operators about usage. Such measurement is one of the crucial issues facing VOD, since it’s the currency advertisers need to invest in the space. Many operators are just beginning to mine such usage information for programmers and advertisers.

Time Warner Cable acknowledged that it had discussions with Coca-Cola about its interest in the VOD space but declined to provide further details. Neither Cox nor Comcast were able to provide executives to comment on their work with Coca-Cola.

Coca-Cola has become increasingly keen over the past few years about testing emerging advertising platforms, such as video games, the Internet and VOD. In fact, the company increasingly has been moving its ad dollars away from the broadcast networks-by 10 percent or more over the past three years-and in many cases toward cable, Mr. Raines said.

Coke’s interest in VOD represents one of the two approaches that marketers are likely to take over the next year or so as an ad-supported model for VOD is tested and hammered out. The other tactic will be more aggressive trials of traditional 30-second spots in free VOD content to gauge consumer tolerance for such ads.

Other large marketers are also looking to create or aggregate content for VOD.

Anheuser-Busch hasn’t jumped into the VOD space yet, but expects to within the next year, said Tony Ponturo, VP, global media and sports marketing, at Anheuser-Busch. Like Coca-Cola, the beermaker would want to develop branded content more akin to entertainment rather than run a regular commercial in front of a VOD program, he said. “If you are going to be there, you aren’t going to run a regular commercial. If there is an ad opportunity it needs to be entertainment, promotional,” he said.

Expect DaimlerChrysler to also play in the space in 2005, with long-form programming and shorter ads in the 5-, 10- or 15-second range, said Julie Roehm, director of marketing communications for Chrysler, Jeep and Dodge. “Why does it have to be a typical ad format? There is a lot of room for experimentation. We want to see, in terms of efficiencies, does one create efficiencies more or offer more efficiency than the other.”

She added, “I think a lot of the additional time on the value of the television upfront has now spawned people to realize the market is moving.”