If you’re an SME looking at next year’s marketing budget and wincing at the thought that you might have to keep the figures at their current levels, or, God forbid, increase them slightly to breathe some life into a deflated market, then I shouldn’t worry.
Other companies do that too, even the biggest ones. They don’t actually come much bigger than Coca-Cola, one of the world’s most famous and largest soft drink manufacturers. If there is a difference between your business and this one, it’s probably only down to scale. What you may spend annually on your total marketing budget might be less than the soft drink giant spends on soap for its rest rooms. Yet, in actual percentage terms, there’s probably little to choose between the two of you. That was, however, until new CEO, Muhtar Kent took over. He’s just announced that he’s about to increase marketing budgets, particularly the company’smarketing budget, by a significant amount in the coming years. How significant? Well, the new social media marketing budget is to rise to 20 percent of the total marketing spend. Now that’s what you call significant.
So what’s the reason for this huge financial investment when the rest of the world’s businesses seem to be cutting back and trimming budgets?
Well, according to Kent, it’s simply because it’s worth it. Five years ago Coca-Cola’s budget for marketing through social media channels stood at just 3 percent, but Kent has seen sufficient statistical and anecdotal evidence to believe that increasing the social budget by such a large proportion will pay dividends. And what exactly is this evidence? According to the CEO, it lies in the proof the company has already witnessed that social media marketing works effectively. The appeal of improving prospect and customer engagement was just too great for the organisation to ignore. Kent said Coca-Cola prides itself on defining the marketing landscape across platforms, but has increasingly turned its attention to focus mainly on internet-based channels. Although television advertising can still be valuable, Kent believes it is relatively too expensive, and can’t improve brand accessibility and overall reputation like a solid social media campaign can.
Social media marketing is already a corner stone of Coca-Cola’s strategy, but will increase dramatically over the next decade as it seeks to double its sales at a minimum. According to Muhtar Kent:
“There were two [main marketing goals]: establishing a long-term vision and restoring growth in North America. I felt that we needed a vision, a shared picture of success – both for us, and for our bottling partners. We call it 2020 Vision, and it calls for us to double the business in 10 years. It’s not for the fainthearted, but it’s clearly do-able.”
If you look at Coca-Cola’s existing social media marketing campaigns, you can see that it was already wildly successful across multiple platforms.
Itspresence alone has drastically improved the brand’s appeal to the younger audience, amassing more than 34 million likes, through engaging campaigns and the aggressive lauding of user-generated content.
Your business probably isn’t in the same league as this, but the lessons are none the less clear. If an advertising strategy is working with a particular channel, then it’s worth increasing the budget, especially when the economy’s not functioning that well. Spend to accumulate and all that …