30 Days of Blog

Coca-Cola is not your friend[30 days of blog 9]

This post is part of my 30 blogs in 30 days series. More details here.

You have seen this story before. There’s controversy around a social media platform or a social media personality. And there is huge uproar in the media. Pressure groups start boycott campaigns against all the companies advertising on that platform.

The social media platform tries to placate them with platitudes and empty promises that they will never fulfill. And some small advertisers start boycotting it ‘out of principle’ because they have investors who don’t mind. However there is silence among big FMCG corporations, the biggest advertisers, regarding the ad boycott. And then suddenly they leap into action saying that they will not advertise on that platform for either a temporary basis or for an indefinite period, one after the other. “Until the platform improves their act”, or a more politically correct version of thereof.

Then the news dies down, the advertisers come back. Because it was never about ethics or morality. It wasn’t even about brand image. It was really really really about money. The big advertisers and even some of the small ones just wanted a better rate for ads.

The facts of doing business on the internet

What we refer to as ads in social media and such engine marketing are not really ads. They are rent. You have to pay Google and Facebook if you want to do business on the internet. This applies to the shop on your corner, the bootstrap startup that your cousin is just well started working at, or multinational corporations, like P&G and Unilever. Whether they want to sell directly to the consumer, maintain brand equity,or if they want traffic to come into their facilities like Starbucks, (which also just announced boycott of social media ads).

Regardless of controversies around YouTube or Facebook or Twitter, the fact is that these companies need to do this to place ads to have a functioning digital presence. Besides that it allows them to track users to get better analytical data. They can’t really afford to not pay that rent. Earnings reports show that the controversies do not have much effect of usage. They need these platforms

Then why do they pull their ads at the first sign of controversy?

Because of Leverage.

Moving the world

Unilever does not care about Pewdiepie is a racist or not. Coke does not care about whether Facebook censors the President of the United States for inaccurate comments. what they do care about is their bottom lines. By pulling their ads, they can exploit the controversy to get leverage, to negotiate and bring down their rates. Having lower prices gives them a competitive advantage. Well not really. They have very little competition in most categories and in some they own all the brands that matter. What it does is lowers their expenditure, which improves their quarterly reports, which increases their share prices which earns the executives of these companies fat bonuses.

Coca-cola is not your friend. It doesn’t care.

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