An October 2008 Coca-Cola ad was meant to convince Australians that the carbonated beverage products will not make children fat. More, caffeine is no problem, nor should consumers worry about soft drinks – especially energy drinks – rotting one’s teeth anymore.

Atlanta-based Coca-Cola is the world’s biggest bottling company and owns 500 drink brands, both sparkling and still. In an attempt to increase its 43 percent market-share in Australia, Coca-Cola launched an ad campaign featuring actress Kerry Armstrong. The latter sold her motherly and wholesome image for the express purpose of making parents feel comfortable about their kids drinking Coke (see image below) and was featured in ads with copy like this:

“Myth. Rots your teeth.
Busted. ‘Coca-Cola’ has the same level of acidity as many other food and drinks. And, when you think about it, drinks like ‘Coca-Cola’ are swallowed quite quickly and the saliva in your mouth washes away the liquid. Dental hygiene is the key! Make sure you look after your teeth by brushing regularly and visiting your dentist. In fact, tooth decay is declining globally, even as soft drink consumption has increased. This all means there’s no real reason why you can’t enjoy ‘Coca-Cola’.”

Coke’ myth-busting advertising campaign backfires – view entire print-ad

The Australian Advertising Standards Bureau (an industry body) had approved the ad, but has subsequently come under fire for that decision. ACCC staff have also stated on the news that the bureau has failed in its duty to uphold the laws of truth in advertising.

The regulator issued a verdict on April 2 demanding costly corrective action. The verdict made front-page news around the globe within 24 hours.

Coca-Cola myth-busting campaign causes worldwide media backlash – Financial Times front page (download pdf)

On Friday, April 4, 2009 Coca-Cola South Pacific gave the ACCC court-enforceable undertakings to publish corrective advertisements in the Sydney Morning Herald, the Age, the Australian, the Courier Mail, the Adelaide Advertiser, the West Australian, and the Hobart Mercury, as well as on the company’s own website.

Plus, Coca-Cola South Pacific has been forced to review its compliance with Australia’s trade practice laws.

Does it matter?
Campaign costs = real cash spent. Besides publicly apologizing and making negative headlines, it is estimated that Coca-Cola paid Kerry Armstrong a fee of around $70,000 (€37′000); the corrective ads across Australia will cost another $200,000, plus the $50,000 paid to the ad agency.

Business ethics. Misinforming the public or taking the truth on a spin is a dangerous and unethical thing to do. The company’s PR folks are trying to spin a bad thing into something good, by doing things like having Gareth Edgecombe, managing director of Coca-Cola South Pacific (a wholly-owned subsidiary), be quoted by an Australian news reporter as follows: “We certainly did not intend our message to be misleading and we have been working with the ACCC to address its concerns…”

Brand management and corporate governance.  “The key to building the socially good brand is a mindshift from silos to systems… from independence to interdependence.” To illustrate, leaving Coco-Cola South Pacific to pursue its own vision created an undesirable social impact that resulted in a form of self-sabotage of the company’s global image and reputation as a trusted brand.

Put simply, a brand is what the corporation tells us about itself or its product – Coca-Cola – and what it wants and aspires to be. Corporate governance should help reduce the risk of localized vision coming into conflict with, and damaging, the global brand.

Reputation management. Reputation is how people feel about a company, the other side of the coin being brand management. This ad campaign and the reprimand Coca-Cola got for it from the ACCC, as well as negative publicity in the media and online do not endear the company to consumers.

Bottom line
This case illustrates that Coca-Cola managers are having a hard time grasping the shift in zeitgeist. For Joe Six-Pack, fairness means that when companies communicate they do it properly and honestly, getting the trust they deserve in return. Coca-Cola missed the public’s thirst for fairness when it comes to what the company tells us about its products; it is time for its executives and other CEOs to realize that and act accordingly.

Some people claimed that the damage to the brand was priceless. We beg to differ. While quantitative and qualitative costs can be identified, Coca-Cola is a well-established brand. Considering its advertising and public relations muscle, the event will surely be forgotten in a few weeks.

This case illustrates that improving market share at any cost – such as not following truth in advertising – is no longer acceptable and could trigger another boycott of Coca-Cola products. The negative effect of this on the company’s stock price would not make investors happy. Though mistakes like this might result in bankruptcy for a small company, this will likely not put much of a dent in yearly earnings for the mammoth that is Coca-Cola.

Our question to readers is, do you feel that this event changed Coca-Cola’s reputation and will it will result in any other consequences? Please share your thoughts and insights on this important issue by leaving a comment. Thank you.

Why might social networks such as Facebook or MySpace fail in your country? Why could it be the LinkedIn is of little help when trying to find a new job or trying to make that sale?
Could it be that you are just wasting time instead of focusing on what really matters? Are Obama and McCain’s image wars helping us understand real issues – such as healthcare reform – better or are these just great headline grabbers?

Recently we brought you a story with quotes from Jeff Bezos and Richard Branson about building brands and why your reputation may not be the same as having a brand:

brand versus reputation – Jeff Bezos, Richard Branson, Josef Ackermann and Pat Russo to the rescue

Some people have suggested that you build your brand or social network using online tools. Examples are the world’s two largest social networks, MySpace and Facebook. But why do these barely register in Japan.

Facebook’s unique selling points is the usage of real names and photos in profiles. This may be true but it’s exactly what Japanese web users usually try to avoid. And they already have a high-trust, invitation-based social network anyway: Mixi.

Serkan Toto – why cultural differences make it difficult for western social networks to succeed in Japan

What triggered this whole post was a website called Seedcamp that wants to help the next generation of internet entrepeneurs. Whilst studing their site and the application form for entrepreneurs I cam across an interesting question:

The name and email address you use for you Facebook profile

Maybe the venture and start-up folks behind Speedcamp have not heard about the extreme proliferation in this space and how cultural factors could be a detrimental to the use of certain types of social networks in certain countries (what about micro-blogging and Twitter)?

So this got us to think about our experiences in the blogosphere since we began in 2000 with our blog EU-IST for security and risk experts

Here are some of the facts we learned the easy but mostly hard way having been part of the blogosphere for quite some time:

1) forget overnight success when it comes to blogging or any other social media;

2) superb viral campaigns we here about but those are the exception to the the rule, meaning if you succeed with one, congratulations but don’t hold your breath;

3) do not believe anybody who says they can systematically achieve success with social media via viral campaigns or other attention grabbers;

4) you are now involved in an ongoing dialogue with your market that you are no longer controlling;

5) preparing good content will require effort and time – you may not even know the opportunity costs until some time down the road;

6) running out of content or ideas is unlikely to happen, unfortunately, tracking it all will be difficult unless you have some tools that help you benchmark better; and

7) ever more social networks are becoming available and might vanish within a few months – - hence neither put your eggs exclusively in the Facebook nor LinkedIn basket, instead, create content on your own blog, micro-blog and so on in order to have it picked up by other bloggers and various virtual communities across various social network platforms.

Bottom Line

Achieving success in the blogosphere or the social media space is not a destination but an exciting journey. For sure is that maintaining success and keeping your readers involved requires continuous effort regardless of how you define the term success. As well, because it takes time you should start today. Waiting means you are loosing valuable time.

TIDBIT – Image as part of the brand

How could we describe this concept?

Image defines how the company is seen by one constituency.

Accordingly, different constituencies or stakeholders ranging from investors to customers or suppliers to employees can have different images of the firm – see also brand versus reputation.

Hence, a well managed brand requires a unified image that results in a reputation that is the mirror of the brand and not something vastly different (e.g., Dell’s attempt to portray an image of great quality and customer service…. while reputation tells us something vastly different – see my crashed Dell and trying to get it fixed – what a nightmare).

In the current US presidential campaign, McCain and Obama have organized their campaigns around the bread-dead, instant-rebuttal paradigm of modern democratic politics. This results in important issues being ignored in this image war. Image is one thing, however, leading by example or behaviors speak louder than words requires that the U.S. electorate demand a careful debate about healthcare reform, social security and the govenrment debt that the media and candidates have delivered so far.

Fact is that while a Facebook community might love your company, the LinkedIn users might not

. Similar to the TV market proliferation the same is happening when it comes to social networks. Managing your reputation and protecting the brand is becoming ever more difficult while your image may suffer or win with certain constituencies in the virtual marketplace. So monitor the social media space to protect your image.