Coca-Cola is tying with Walt Disney to create a new agency to handle the worldwide advertising for its main Coca-Cola account.
This is the second time Coke has sent shock waves through the agency world with its main brand business – the first time was in 1993 when it moved the creative account out of McCann-Erickson, where it had been for 38 years, and into Hollywood talent company Creative Artists Agency.
The chairman of CAA was Michael Ovitz – now president of Disney. It was Ovitz who brokered this deal. The new agency will be headed by three key executives from CAA who previously handled the business. The as yet unnamed agency will have only one client – Coca-Cola – but billings for this one account will be $500m (324m). The agency will also do project work on Coke’s iced tea account, Nestea.
Coca-Cola will finance most of the new agency, paying salaries and expenses, while Disney will be a passive investor with a minority stake of about ten per cent.