Coke (NYSE: KO) is one of history's strongest brands, ranking No. 1 in a recent BusinessWeek article citing Interbrand data. But the soda giant has arguably rested on its laurels for the past few years, leading some to wonder whether Coke might lose its touch with the next generation. However, Coke seems to be pulling itself together, having signed a co-marketing agreement with Apple's (Nasdaq: AAPL) iTunes.
Through the agreement, Coke will offer codes for 70 million free iTunes songs to thirsty European music fans. (Sorry, U.S. soda enthusiasts, but the deal only applies to the U.K. and Germany.) Given iTunes' popularity, the deal should increase Coke's cool factor with young British and German audiences. It also follows Coke's recent abandonment of its own European digital music site.
Although Coke's brand is strong, its growth and stock price over the last several years haven't exactly impressed many investors. (Of course, that same stock price made it irresistible to Motley Fool Inside Value's Philip Durell, who has recommended Coke to subscribers.) Reenergized marketing might help boost Coke's fortunes, but it's not the first soda company to catch on to iTunes' coolness. Rival PepsiCo (NYSE: PEP) gave away free iTunes downloads several years ago, in a campaign that surprisingly seemed to fizzle for Pepsi and Apple alike.
Even more recently, Coke showed geezer-like tendencies in shunning a popular Internet video showcasing the explosive, spectacular effects of combining Diet Coke and Mentos candies. (Fool Rich Smith believed it was an idiotic move, considering that most companies dream of free word-of-mouth advertising.) It was troubling to think that Coke just didn't get the brave new world of modern advertising, so its iTunes deal is a bit heartening.
Hooking up with iTunes may not be original, but it's a step in the right direction. Several news agencies also pointed out that Coke is trying to make up for lost time in the viral-marketing arena by allowing users to post their own videos on an interactive website.
My Foolish colleague Nate Parmelee recently observed that Coke's last quarter showed some improvement. That bodes well for the company, as does its more energetic, forward-thinking marketing. After all, Coke faces plenty of competition in quenching people's thirsts, including the aforementioned Pepsi, Cadbury Schweppes (NYSE: CSG), and hot stock Hansen Natural (Nasdaq: HANS). As the U.S. bakes under the scorching summer sun, it's extremely important that Coke keep its cool.
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Alyce Lomax does not own shares of any of the companies mentioned.
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