Dive Brief:

• The Coca-Cola Company called out a growing reliance on digital marketing initiatives to connect with consumers on a call discussing first-quarter earnings. The company saw organic revenue up 12% year-over-year over the period, largely driven by higher prices. 
• The soft drink giant highlighted its work with WPP, which was named global marketing network partner in 2021, in areas like personalization and collaborations. A Coke Studio concept focused on live digital music experiences has seen strong engagement, with the latest season drawing over 1 billion streams.
• Coke Studio has scaled to 30 markets and become an “always-on” program, CEO James Quincey said. Executives also pointed to a new partnership with ChatGPT developer OpenAI and consultant Bain & Company as helping build a bridge with groups like Gen Z, though they did not detail specific results.

Dive Insight:

Coke posted strong performance in Q1 2023 despite a murky macroeconomic picture, another sign that consumers have resisted trading down despite inflation. Meanwhile, the resurgence of away-from-home purchasing occasions bolstered the bottom line, with global sales volumes up 3% year-over-year. The firm upheld prior guidance of 7-8% organic growth for the full year.  

While leadership attributed organic revenue gains in Q1 primarily to pricing, they also detailed the ways in which Coke is using digital marketing to connect with consumer passion points, including through Coke Studio and a fledgling partnership around generative artificial intelligence (AI). 

At the global level, Coke Studio is gaining traction after about a year in market. An initial iteration of the program debuted in Pakistan in 2008, a region where it’s continued to see success. The concept expanded in May 2022 as a digital-first way for Coke to connect with emerging music talent and tie back to a “Real Magic” platform introduced two years ago. One aspect of the initiative is including QR codes on packaging that can be scanned to access interactive digital experiences. 

Coke touting its marketing wins to investors is a feather in the cap of WPP Open X, the bespoke unit the ad-holding group created when it was named Coke’s global marketing network partner in November 2021. Open X uses an integrated model that manages end-to-end creative, media, data and marketing technology across Coke’s portfolio. Recent output from the shop includes a Coke campaign with model Gigi Hadid celebrating shared connections through food and ads promoting a rebrand for Fanta that features the fruit-flavored soda’s first global design.

In Q1, Coke also made efforts to stay on top of emerging technology trends that have captivated the marketing world and general public. The company was the first to take advantage of a new alliance between OpenAI and Bain & Company related to generative AI. The first fruit of the partnership, a campaign called “Create Real Magic,” asked artists to use the AI-powered ChatGPT and DALL-E tools to create ads for Coke, with select winners displayed on billboards in high-traffic neighborhoods in New York City and London. 

Speaking on the strategy behind work like “Create Real Magic,” CEO Quincey said that Coke’s marketing has become “much more digital over the last three years” and that the shift is starting to drive a difference with demographics that have previously been hard to win over.  

“[You're] starting to see an impact come through on the aggregate recruiting numbers, on the aggregate engagement with Gen Z and the increase of Gen Z coming into the franchise,” said Quincey on the earnings call.