Last week we saw quarterly results for various blue chip companies. Pepsi, McDonald’s, Domino’s, Amazon, American Airlines, Chipotle, T-Mobile and even Twitter managed to delight shareholders with positive results, or at least results that were deemed a break from negativity in prior quarters (Twitter!).
Sadly (if you’re one of their shareholders), that was not the case for The Coca-Cola Company and Procter & Gamble. These two pillars of the S&P 500 were punished for less than stellar results. The interesting thing was that both announced significant marketing news in response to their poor Wall Street showing.
Of the two companies, one had clearly seen the headwinds coming and had grabbed marketing headlines for the last few weeks to build perhaps a cushion to soften the blow and to show “The Street” that when the going gets tough, the C-suite gets going. The other company was The Coca-Cola Company.
P&G has been grabbing marketing headlines since the beginning of this year. Mr. Pritchard, Procter & Gamble’s Chief Brand Officer and chairman of the Association of National Advertisers (ANA), first confessed that P&G had lost its way in recent years, chasing shiny new objects and thereby fragmenting many of their top brands’ key audiences, and underdelivering on the reach-tonnage they need to shift the millions of SKU’s they have.
After that confession, Mr. Pritchard went on to challenge the digital ad industry in his role as ANA Chair and told the industry it was time to “cut the crap” (his words) and return to a world where media delivery is measurable, the way it is bought is transparent and the agencies managing it are on the advertisers’ side. All of this a clear strategy to right the ship that had gone adrift.
This was followed last week by P&G CFO Jon Moeller, who reiterated P&G’s new marketing direction as laid out over the last few weeks by Pritchard. As Moeller is the CFO, he added the numbers that go with the strategy: marketing budgets are to be reduced by $2bn by “eliminating media supply waste, reduced agency fees and cutting advertising costs”. He specifically addressed the middle men saying “There are too many holes, too many people are able to take advantage, it’s murky”, thus proving a perfectly aligned C-Suite.
And what did The Coco-Cola Company do? Well, they had already let CMO Marcos de Quinto go after only 2 years and 3 months on the job. So they announced a significant round of head count reduction (of 1,200), which would include further marketing department reductions (a lot of departures had already happened when Mr. de Quinto took on the CMO role).
What is perhaps most surprising is that, after 130 years (the company celebrates its birthday May 8) it will be completely without a dedicated marketing leader. That responsibility is now incorporated into the Chief Growth Officer function that straddles marketing, customer and commercial management. I cannot stress enough what a big departure this is for The Coca-Cola Company. Sure, Joe Tripodi at one point had the title Chief Marketing & Commercial Officer at Coke, but it was still marketing first. Now marketing at The Coca-Cola Company is not only not a function, but nobody in the C-Suite even has the word marketing in their title.
At Flock, we have helped many companies with reviewing and redesigning both their internal marketing eco-systems as well as their external agency eco-systems. Building an org structure and process that sets companies up for success is critical to align sales and marketing. If you want to see some examples, contacts us and we will gladly share some cases.
[Maarten is a featured contributor to MediaPost, this article was originally published here]