Coca-Cola had an eventful 12 months. A steep decline in Diet Coke amid health concern claims; its executive compensation plan is under fire from shareholders; an embarrassing episode at the Sochi Olympics; a decrease in stock rise (only 11% since 2012, against increases of 47% in the S&P500, and 26% for rival PepsiCo), and now the impact of the social unrest in Brazil in advance of the World Cup.
The impact of the unrest in Brazil
The latest bad news to hit involves the brand’s high-profile sponsorship of the Brazilian World Cup, due to start in early June. Coke’s share price shot up with the news that it will once again be the corporate face of the World Cup, and this campaign will be its largest ever, spanning 175 countries in total. Unfortunately, this has coincided with unprecedented political unrest in Brazil, with a public increasingly outraged over the cost of the event and various social issues associated with it, and taking to the streets for protests which have attracted widespread media coverage and frequently spilled over into violence.
Coca-Cola’s shift in strategy in response
Coca-Cola’s team swung into play with an evidently well-prepared plan, and toned down its marketing efforts to reduce the brand’s exposure to negative feedback. Whilst this unfortunately also resulted in a drop in share price, it demonstrates that the brand is very aware of the value in responding to strong social sentiment.
The social sentiment behind the protests
Brazil’s huge investment in the World Cup coincided with a deeply unpopular rise in bus fares, a stalling economy and a rise in the cost of living for citizens. Delays in stadium construction, and forced evictions from many favelas have also hit the headlines. Protesters are anxious to show the outside world that the image their government is trying to project, of a happy country with no problems, is misleading. Popular support for the tournament has slumped from 80% to only 50%. Brazil is Coke’s 3rd largest international market, and sales dropped by 2% in 2013 partly due to negative consumer sentiment, so it’s no surprise that the company was wary about how things might turn out.
Coca-Cola isn’t the only big brand associated with the World Cup of course, and neither is it the only brand suffering as a result. Sportswear icons Adidas took a lot of heat when they launched a range of t-shirts with a sexualised theme, and were forced to withdraw them after outrage surfaced on social media.
Car manufacturer Fiat decided to withdraw TV spots after its new slogan “Come to the street, come!” was adopted by protesters.
“Some companies are stopping campaigns because they don’t want to become connected to the movement…It doesn’t make a lot of sense to [go forward] with a social media strategy if your brand is not prepared to connect with what people are talking about.” – Brazilian digital agency SapientNitro iThink
Many brands and digital agencies that are active on social media are having trouble adjusting their marketing due to the fluctuating situation in Brazil. Whilst they need to maintain a positive spin on the World Cup, at the same time they can’t afford to ignore the grievances of the protests. Some have chosen to become involved in the conversation whilst others have either paused their social activity or been forced to delete posts that misjudged the mood.
Brands need to understand that people know the impact they can have on a company’s bottom line, and be prepared to put their marketing into turnaround instantly when the situation calls for it.
Although some suggest that analysis over too many platforms in constantly-changing situations can lead to confusing results, it’s not putting brands off trying. Coke’s biggest competitor, PepsiCo, have also been busy in participatory marketing – real-time social sentiment towards their Gatorade brand is monitored and analysed constantly, allowing them to gauge consumer mood and tweak new products prior to launch.
The ultimate lesson from this is that brands must be prepared to listen and engage with social conversations if they hope to escape flak when things go wrong. Coke is monitoring up to 14 separate platforms for its marketing data and despite the unrest in Brazil, at time of this analysis 90% of the 400 million+ social impressions concerning the World Cup had been positive.