Did Ronaldo damage Coke’s brand? It depends where you were standing

Our trusty columnist has been away for the past 10 weeks teaching the Mini MBA in Marketing and Mini MBA in Brand Management to 3,000 marketers across more than 40 countries. With class over and fresh from winning the PPA Columnist of the Year award, he returns with his own take on the Ronaldo Coca-Cola incident.

Portugal’s captain moving Coke bottles in a press conference at Euro 2020 sent the marketing world into a frenzy of contradictory opinions.

My favourite movie of all time is Bullitt. Steve McQueen wears a turtleneck, says very little and drives the shit out of a green Mustang while making a major impression on a ridiculously hot Jacqueline Bisset. It’s a fantastic film. Great to watch solo or with friends. Perfect when you are shit-faced. Or on a plane. Or both. And it’s a lovely film to watch with the little ones too. Possibly.

So when someone once asked me about my favourite film across a table at a very fancy dinner party in West London I did not hesitate. “Rashomon,” I said. “Got to be Rashomon.” I was not going to let on to these very fine people that I was into dumb plots with even dumber car chases, so I opted for the most arcane, intellectual movie I could think of.

And it does not get much more arcane or intellectual than Akira Kurosawa’s iconic, black-and-white classic from 1950. The plot describes the murder of a local samurai from the perspective of his wife, a bandit, a woodcutter and – through a medium – the dead warrior himself. I can’t remember how it ends because I fell asleep two-thirds of the way through. The total absence of turtlenecks, Mustangs and Jacqueline Bisset really made it hard work on the back nine. But useful at dinner parties nonetheless.

Rashomon’s central point is that all its characters’ accounts of the events of the movie are contradictory. While the viewer attempts to identify who is telling the truth and what actually transpired, they gradually realise that there is no definitive account. Each actor saw the event from their point of view, drew their own biased conclusions and therefore no single objective reality can possibly exist. Again, I missed the last 30 minutes so there might have been a dramatic change with robots or a shark. But I doubt it.

Contradictory perspectives

I thought about Rashomon last week before the European Championship game between Portugal and Hungary. Footballing superstar Cristiano Ronaldo swaggered into the pre-match conference, looked at the world’s media and…well, you know what happened next. Everybody does. Ronaldo grimaced, slid the two bottles of Coke in front of him out of shot, and picked up a bottle of water. “Agua,” he announced, holding the bottle aloft.

It took barely a minute for the whole scene to play out. But that was all it needed for the marketing and media machine to spin into orbit. And what made the whole thing interesting was the Rashomonific way the saga played out across the subsequent seven days that followed it. Because, although everyone saw what Ronaldo did last week in Budapest, what they made of it very much depended on where in the marketing playground their ass was located.

What we really learned last week is what a total fucking zoo the marketing world has become.

For anyone working in sports sponsorship, this was a prime example of how powerful endorsements work and also how important it is to lock their execution up in a manner that will not misfire and do any brand damage. It was also a painful example of what can happen when a former endorser (Ronaldo featured in ads for Coke back in 2006) is no longer on the payroll and able to do it his own way.

The move was also prime fodder for the more than 9 million millennials who now run their own influencer agencies. LinkedIn was drowning in immaculately inane ‘experts’ keen to draw an immediate link between Ronaldo – the ultimate influencer – and his impact on the sales of bottled water and negative influence on Coke. The fact that dissing the brand so publicly cost the Coca-Cola company a whopping £3bn demonstrated, once again for these purveyors of influencer marketing, the incredible ROI of influencer marketing. Why bother with sports sponsorships when individual influencers are now clearly running the show and having multibillion-pound impact?

“Hold my beverage, cried a small army of financially savvy marketers. That multibillion-pound loss was fake news. Coca-Cola did not lose anything; its share price dropped, thus reducing the company’s market capitalisation.”

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But Coke’s stock dropped before Ronaldo placed his pert Portuguese posterior on the hot seat and starting messing about with red bottles. The market was generally trading down that day already and Coke was suffering from becoming ex-dividend. In fact, in the subsequent trading after Ronaldo moved his two red bottles, Coca-Cola’s share priced increased by 30 US cents, adding about a billion quid to the company’s value. “Why don’t marketers understand financial basics?” groaned the eight people who work in marketing, and understand and care about these things.

I’m not surprised the share price went up, claimed the Ehrenberg Bassists from the back of the room, where they had been sulking and wearing black robes. “Salience,” they all shouted as one. “Salience! Brand image is all but irrelevant! Mental availability is almost all that matters! A billion eyeballs seeing those Coke bottles and then their continued coverage in the days that followed will surely have helped, not hurt, Coke’s sales. No wonder the share price went up. It’s a scientific certainty. Also, salience!”

“Are you high?” asked the traditional brand theorists from America. “Clearly the impact of someone as healthy, attractive and admirable as Ronaldo rejecting Coke runs directly counter to the brand’s DNA and its associations of feeling good and total refreshment. This contradictory moment will clearly have a major impact on how consumers perceive Coke and will certainly damage sales. This is New Coke all over again. Again. Brands take a lifetime to build, but their image can be tarnished in just seconds.”

No interpretation was entirely right

And on and on it goes. Each corner of marketing saw something different in Ronaldo’s moment of Coke madness. And each immediately explained the incident in direct contrast to the other sides of the discipline.

From where I was watching, almost everyone had a point. Yes, the situation would have cost Coke a couple of points of brand equity through damage to its image, but this was probably more than restored thanks to global salience from the coverage. But neither impact would have been particularly telling in the long run.

Similarly, sports sponsorships and influencer marketing can have a role to play in brand building but neither of them were anything other than tangentially involved in last week’s saga. This wasn’t a strategic move by anyone nor was it an exemplar of a particularly impressive channel execution. It was just a sports star, a father, reacting in his own impromptu manner. The lack of strategic motive or direction in all of this seriously undermines the enduring value of any media or marketing lesson from the saga. Shit happens.

Coca-Cola’s share price was certainly not impacted by the move either, but the general acceptance that it might have been does offer a telling insight into just how moronic a significant proportion of marketers really are.

That does not mean that Coca-Cola should not be worried about such things, however. The Coca-Cola company owns more than 400 brands and yet its biggest asset – the Coke brand – is now worth almost exactly a third of the total value of the whole company. That might have been reassuring back in 1995. But Coke now sits, in almost every major distribution channel, on constant price promotion with usually 30%, 40% even 50% off its RRP. No brand, even Coke, can survive that forever. Perhaps Ronaldo’s actions last week should be seen as a symptom, rather than the cause, of Coke’s misfortune.

But what we really learned last week is what a total fucking zoo the marketing world has become. Black battles with white. Upside can also be downside. Cold can run with hot. Just like that old, arcane Japanese movie, everybody has a take these days and it tells you more about them than the thing they are talking about.