It was a classic Hollywood power play—a Coca-Cola Classic. Two weeks ago, at virtually the same time that Michael Ovitz was installing a new boss at MGM on behalf of its owner, Credit Lyonnais, the top marketing executive at Coca-Cola Co. was abruptly out. Peter Sealey, the man who had championed Creative Artists Agency as the answer for Coke's lackluster ad campaigns, dismissed by Doug Ivester, the number driven executive vice president who heads Coke's North America operations. For Ovitz, the change was potentially troubling. He and the team of advertising specialists at CAA--Len Fink, Shelly Hochron and Bill Haber--were scheduled to meet in Atlanta on July 22 to present ideas for next year's Coke Classic campaign. No longer would they have their patron, Sealey, across the table from them. Nor would they have another familiar face, Don Keough a friend from the days when Coke owned Columbia Pictures on hand. Keough, Coke's president, had recently retired. In effect, the key executives who had "green-lighted" CAA's celebrated and controversial push onto Madison Avenue's turf were gone.
Instead, the CAA contingent would be meeting with a figure unfamiliar to them: Sergio Zyman, the new chief marketing officer. The 47-year-old Zyman had worked for Coca-Cola in the past, scoring some of its greatest new product triumphs as well as helping engineer one of its biggest flops, New Coke. Now he was back, tapped by Ivester to rejuvenate the fortunes of the various Coke brands. Like a new studio boss, he would have his own decisions to make, his own stamp to put on projects. And Zyman, dubbed the "aya-cola" for his hard-charging management style, could be counted on to ask tough questions and voice his opinions. Says a source close to CAA, "If there were going to be changes made with this new guy in place, this meeting was the perfect opportunity for him to say, 'Scale it down, mix and match, change this or that.'"
Zyman made his feelings known right away--that CAA had gone even farther this time, with work that was even more unexpected and diverse than the current "Always" campaign. As Ivester and John Hunter, head of Coke's international business, hummed along to the "Always" theme, Zyman provided running commentary on the spots. In the end, he approved 31 of 33 concepts, and even asked for six additional variations. "It was a major victory," says the source. The Coke officials "embraced everything."
By giving CAA a giant bear hug (one carryover concept for 1994, in fact, features the animated polar bears that proved to be the most popular among consumers), Zyman made it clear he was continuing, and in some respects, deepening the relationship between the client and its new-fangled agency. "If Sergio's involved with Coke, he's CAA's partner," says a person familiar with the company. "The dialogue is ongoing, and they're excited about that."
At the same time, Coca-Cola has become known as an account that shortens career life spans. McCann-Erickson, its longstanding agency of record on the flagship brand, has churned through many creatives in search of the one that will win favor. The new diet Coke campaign, "Taste It All," devised by McCann's sister agency Lintas:N.Y., was silenced less than a year after its debut. Sealey, the architect of what he called a "new paradigm" for advertising, lasted barely three years. What's more, Ivester and Hunter, faced with a sluggish soft drink market in the U.S. and new beverage competitors nipping at its cola heels, have only a few years to demonstrate they are worthy successors to chairman/ceo Robert Goizueta.
"Ivester is on track to go where he's going to go," says Tom Pirko, who heads marketing consultancy Bevmark Inc., referring to the position left open by Keough's retirement. "He's in a superior position now, but he needs his lieutenants. He was looking for .50-caliber machine guns. Peter doesn't carry that kind of weight. Sergio does."
With Zyman on the firing line in support of Coke's brands, bold changes in tactics are a distinct possibility. Zyman has never been one to shirk from such high-stakes assignments. Indeed, just a year ago, when CAA first made its inroads into Coke's creative stable, Zyman was quietly working on an alternative campaign to "Always." Ivester had called him in, concerned that he needed a backup to the CAA work being championed by Sealey. He asked Zyman to come up with ideas that would stress Coke's enduring values, yet still reflect a '90s sensibility.
Assigned to work with Zyman was Gordon Bowen, the McCann creative director who had been expensively wooed to the agency and then fallen out of favor as McCann struggled to sell through its work. The shadow campaign was a chance to show what the creator of the American Express "Portraits" series could do with an icon like Coke. In less than two months, Bowen and Zyman assembled a score of concepts, under the themeline "Feel It," to present to Ivester.
Where CAA's "Always" campaign barraged consumers with quick clips of MTV-style visuals and catchy music, the "Feel It" spots used traditional marketing techniques. The campaign proposed that Coca-Cola would get a lot more impact from a few powerful commercials than a lot of short, unrelated bursts. All of the suggested spots presented more stylized versions of Coke Classic vignettes. In one, a teenage girl, after an argument with her boyfriend, shares a Coke with and is comforted by another attractive young man--who turns out to be her brother. In another, a group of teenagers set out at sunrise to go whale-watching in Baja, California, using Cokes to wake themselves up and, in the end, calm their nerves as they dive among the whales. As a strategy statement for "Feel It" pointedly remarked, "Coca-Cola represents all those things which are positive, uplifting and celebratory. If Pepsi is about trends and surface, about cynicism and hipness, and anything but cool for its anarchic self, Coca-Cola can be diametrically opposed for the good."
The reference to Pepsi was understandable. Even though Coca-Cola continues to outsell its arch-rival, it's been unable to shrug off a dull, stodgy reputation. CAA's work promised to get Coke noticed again as a cultural force, and McCann couldn't offer the same. The "Feel It" spots never were produced, and Bowen was let go by McCann in February. But the shadow campaign apparently sparked McCann's interest in Zyman; according to a Zyman associate, McCann and its parent, the Interpublic Group of Companies, discussed a "liasion" position for him at the end of last year. Phil Geier, IPG's chief executive, declined to comment; a McCann source says the agency prepares backup campaigns as a matter of course.
Given their declining fortunes with Coke, it's not surprising that McCann and IPG would want Zyman on its side. And it wouldn't have been the first time that Zyman was working on different sides of the cola wars. In the '70s, the London School of Economics graduate was hired by Pepsi-Cola Co. and put on the successful Pepsi Challenge campaign. At one point in his ascent as a marketer, Zyman had crossed paths with Roger Enrico, the man who would become president of Pepsi. In his book The Other Guy Blinked, Enrico describes a shrewd, "web-weaving" Zyman who would go to absurd lengths to protect his power and advance his status.
In 1979, Zyman jumped over to Coca-Cola and was assigned to develop a diet drink. It was Coke's first line extension, a concept akin to heresy within the company. Zyman's stunning success with Diet Coke--it soon became the world's No. 3 soft drink--established him overnight as Coke's new product wunderkind. He embellished his reputation with the shepherding of other brands like Minute Maid orange sodas and Cherry Coke. In 1985, he was summoned again when Coke worried that Pepsi's steady market gains suggested consumers really did prefer a sweeter cola. Zyman attacked the problem of selling a reformulated Coke with the same ferocity and confidence he used to push Diet Coke.
Although the launch of New Coke quickly turned into one of the business world's most memorable busts, it provided a revealing glimpse of Zyman at work. Just before the launch, he grew impatient with McCann's inability to deliver a campaign he liked. According to a McCann creative at the time, Zyman seized total creative control, reducing the McCann team to bystanders. "There's a reason his nickname is the aya-cola," says the creative. "He loves absolute power and, even by Coke standards, he's the consumate politician." Other former associates recall his fondness for paper shredders and code names. After the New Coke fiasco boiled over in the media, Zyman began to distance himself from the product. One McCann employee recalls him starting a strategy meeting with a straight face: "Disregard all previous instructions."
Zyman left Coke in 1986 amid controversy over New Coke and his bruising style. Still, his political acumen and marketing smarts kept him in demand from clients such as Miller Brewing and Club Med, while he took on consulting projects for Coca-Cola. "What makes Sergio so valuable is he is brilliant as an intuitive marketer," says a friend and business colleague. "That's because he's got a good classical business background; he's got a good understanding of the fundamentals of business. That understanding gives him a holistic view of what really makes a business work, not just what makes marketing work."
Coca-Cola is betting that vision, that flair for innovation, will jump-start its advertising strategies the same way Zyman launched the company in product development. And in sharp contrast to Sealey, whose decision-making could be slowed by his vague and at times theoretical manner, Zyman is a do-it-now executive. "I've been to meetings where Sealey saw 100 ideas; his eyes would glaze over," says one person who has seen both men in action. "He'd say 'We don't have it yet,' but he was incapable of saying what 'it' was. He was uncomfortable with his own judgment. Sergio is refreshing, he knows marketing backwards and forwards. He'll say 'I love it' or 'I hate it' and tell you why. With Sergio you have a dialogue."
Within the Coke hierarchy, Sealey was seen as Keough's minion, executing orders at his behest, at times seemingly more interested in proving Madison Avenue extinct than getting bottles of Coke into consumer's refrigerators. Despite his longtime ties to Coke, Sealey was never really a soft-drink promoter at the company; his career path instead took him to stints at Coke's motion picture and wine properties. "If Coke has a corporate culture--and it's pretty clear they do--Peter Sealey never even got a green card," observes one agency veteran. "He never meshed with that culture."
So if the suddenness of Sealey's departure was a surprise--many of Coke's agency contacts first heard the news from reporters--it was not unexpected. For the 46-year-old Ivester, in competition with Hunter to become Coca-Cola's next ceo, the bottom-line success of Coke's advertising strategies has taken on a new urgency. Says Bevmark's Pirko, "Doug (Ivester)'s personality dovetails into Sergio's. You have two guys who are very focused, very direct. They're dedicated to doing things in a forceful way."
The Coke USA chief needed to get Zyman on board before the company committed to its new 1994 ad campaign. He also needed to send a signal to bottlers still waiting for results from Coca-Cola's Hollywood experiment. Through mid-May, supermarket sales of Coke Classic were up 2.5% over the previous year, compared to overall growth of 1.3% for soft drinks, according to market research firm Information Resources Inc. While hardly explosive growth, the numbers have encouraged Coke officials, who say their internal tracking studies are showing a positive response to the CAA ads.
"Ivester's got a one-year grace period where he'll be allowed to blame things on the sins of the father," says a source who has worked with Coca-Cola. "By the second year, he and Sergio will have figured out whether to stay with CAA or rethink things all over again. The third year, things either have to be working or Ivester will be looking for another job."
At Coke's lead agency, McCann, the shift in the client ranks may present an opportunity. McCann is working on its own Coke Classic campaign for 1994, which will get a hearing in Atlanta. Insiders say Zyman still harbors a grudge against the agency for the New Coke debacle, although he is said to be fond of Marcio Moriera, a Coke veteran who is now the shop's top creative officer. Whatever Zyman's personal feelings are, what counts most for McCann will be the number of spots he assigns to the agency. For "Always," it got to produce only two, against CAA's 27.
That imbalance will eventually show up on McCann's bottom-line results. Top IPG executives told financial analysts at a recent meeting that as soon as CAA becomes a "permanent" member of Coke's advertising family, McCann expects its compensation to be lowered. That renegotiation could happen as early as the end of this year, IPG executives told the analysts.
In contrast, Zyman's return to Coca-Cola is seen as a big advantage at Lintas, the IPG shop that has been wrestling with its own difficulties on Diet Coke this year. Lintas and many of its top executives serve as a reminder of Zyman's biggest career success. Even before Zyman's return to Coke became official, Lintas reportedly brought back Frank DeVito, the Lintas:Americas chief creative officer who over-saw Diet Coke's popular "Just for the taste of it" campaigns. And at The Lowe Group, whose Coca-Cola ambitions are open secret within the IPG empire, the agency has had the benefit of working over the last year on the launch of Clear Tab with Zyman.
The biggest wild card in Coke's deck remains CAA. Would Zyman, a conventional Madison Avenue marketing man compared to Sealey, take to a Hollywood talent agency and its unconventional methods? Ovitz and his colleagues seemed to get their answer that Thursday afternoon in Atlanta. "Sergio was very warm, laughing and cracking jokes," says a source who was briefed about the meeting. "Everyone was having a grand old time. When the meeting ended, there were hugs and kisses all around."
But well before Zyman replaced Sealey, CAA was confident its ties to Coca-Cola were strong and mature, going back many years and reaching to the top level of the company, to Goizueta and Ivester. Because of the force of his personality, Zyman will not be willing to cede as much power in crafting campaigns to CAA as Sealey did. On the other hand, Zyman will be able to provide a clear direction and strategy for Coke's advertising, something that Sealey and CAA were criticized for lacking in the "Always" spots.
For now, CAA still appears to be in the catbird seat. At the end of July, with the go-ahead from Coke behind them and the MGM maneuvers completed, CAA was an agency on a roll. "We had a terrific staff meeting" the Monday morning after Atlanta, says one insider. "We were all really jazzed."
Yet no one knows exactly what the new Zyman era will bring to Coca-Cola. If the past is any indication, it could prove to be a wild, unpredictable ride for those on board with the new marketing chief. "For Sergio, relationships are all about the bottom line," says a former associate. "You hire Sergio Zyman if you want to solve a problem. He doesn't care where the answer comes from." One thing is already certain: Coke, the world's most famous brand, has once again upped the ante as the world's most challenging client.
Copyright Adweek L.P. (1993)