Advertising Age - August 8, 2011

get 2012 ad push
Coke’s futuristic
soda fountain to

advertise Freestyle, consumers can find it at most places,” she said.

According to Bill Pecoriello, CEO Consumer Edge Research, more than 20% of consumers said they would be very likely to switch restaurants or convenience stores due to the presence of Freestyle. Interest in the machine is also particularly high among teens and portions of the multicultural population, he said.

The fountain channel accounts for nearly a quarter of total soft-drink volume, according to Beverage Digest. And Coke dominates fountain business with about a 70% share, compared with Pepsi’s 19% share. While Gene Farrell, VP-general manager for Coca-Cola Freestyle, says Freestyle has yet to impact Coca-Cola’s share, customers say the machines have been a boon for business.

Results have been so impressive at Firehouse Subs that the chain just announced it will be rolling Freestyle out to all of its 437 restaurants by year’s end. Firehouse Subs was included in Coca-Cola’s initial testing phase and saw a sales lift, even without marketing support, said CEO Don Fox. So, earlier this year, the chain opted to install Freestyle in 25 Jacksonville, Fla., locations, turn on marketing support—in the form of billboards, 60-second radio spots, social media and events—and watch what happened.

Mr. Fox said the stores saw a double-digit increase in traffic and overall sales, as well as an increase in people buying a drink and sandwich, rather than just a sandwich. Those stores also saw increased numbers of families with kids coming in, as well as more people choosing to dine in the restaurants.

“Even without the benefit of advertising, it hasn’t been unusual for restaurants to [see overall sales] rise 20% to

30% when they put the machine in,”
Mr. Fox said. “When word gets out,
there’s a great curiosity factor, and it
really doesn’t seem to recede.”
In addition to working on a 2012
marketing push, a new Facebook app
and mobile app are also in the works,
which will allow consumers to mix up
and share favorite Freestyle combina-
tions. Mr. Farrell envisions the recipe
being converted to a 2-D barcode and
scanned at a machine to immediately
generate the blend. Barcode scanners
will be retrofitted for testing on a limit-
ed number of machines in the first
quarter of 2012.

Already Mr. Farrell says the amount of data being gathered from the hundreds of networked machines is “almost overwhelming.” Coca-Cola and its customers are able to slice and dice data about the brands and combinations that are proving popular, as well as find trends during specific day parts. One insight has been the popularity of Caffeine-Free Diet Coke after 3 p.m. That could lead the company to suggest adding that brand to traditional fountains when customers have significant traffic in the afternoon but don’t have Freestyle.

“Think about being a brand manager and seeing a snapshot of how a brand, a new product or a product that’s not at retail is performing. It’s mind-boggling, from a marketer’s perspective,” Mr. Farrell said. “I don’t think we’ll really understand the total value for a few more years.”

MIXING IT UP:

Researchers say interest in the machine is high among teens.

“Even without the benefit of advertising, it hasn’t been unusual for restaurants to [see overall sales] rise 20% to 30% when they put the machine in.”

Keep up with the latest marketing news at AdAge.com

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Super Bowl-'X Factor' agreement
to have NBC, Fox playing nice

‘X FACTOR’ DEAL from p. 3

which will give NBC’s broadcast of the game a promotional mention several times in a program expected to be one of the most-watched this fall.

One person familiar with the negotiations suggested some final details were still being ironed out, such as how NBC will be mentioned or depicted on Fox’s air.

Acceptance of this deal represents a
new step for broadcast networks. Over
the years, they have been wary of
allowing promotion of other TV net-
works’ properties on their air. In 2009,
Stop Believin’” during the
Peacock’s broadcast of the
annual Macy’s Thanksgiving
Day Parade. In 1997, NBC and
CBS turned down a commer-
cial from General Motors’
Cadillac featuring actor Dennis
Franz playing a tough-talking
cop—much like the character
he played on the then-running
ABC hit “NYPD Blue.”
This particular deal is also
unusual because NBC is using
the Super Bowl as a platform for its
fledgling program “The Voice,” which
features artists such as Cee-Lo Green
and Christina Aguilera selecting and
coaching singing contestants, and is
such a clear competitor to “X Factor,”
which stars Simon Cowell and Paula
Abdul.NBC sees “The Voice”as a linch-
pin of its turnaround effort and it will
debut after next year’s Super Bowl. Is it
wise to remind viewers, even just a little,
about the plethora of similar programs
available to them when you’ve put so
much money and effort to market your
own? The answer notwithstanding, a
Pepsi spokeswoman said NBC had
cleared the ad to run.

PepsiCo’s years-long sponsorship of
the Super Bowl surely helped break
down any resistance to the agreements.
Between 2001 and 2010, PepsiCo spent
about $170.8 million on advertising
during the game, making it the second-
biggest spender on the event behind
Anheuser-Busch InBev, according to
data from Kantar. The company
benched advertising for its beverages in
2010 as it pursued a “Pepsi Refresh”
project, but PepsiCo returned its bever-
ages to the Super Bowl in 2011.

‘THE VOICE’:

The big game will also be a platform for promoting NBC’s “X Factor” rival.

$3.5 million for a 30-second spot in next year’s game, though Pepsi is likely to pay less, especially if it purchases a large percentage of the available inventory in the broadcast.

While Pepsi has successfully lobbied NBC to carry an ad featuring a participant in a rival network’s show, Pepsi in the past faced defeat on this front. In 1997, ABC refused to run a Pepsi ad featuring actor Robert Stack—then appearing in NBC’s “Unsolved Mysteries”—trying to defend cans of the company’s popular soda from theft with a “Pepsi Club.”