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Coca-Cola Ends Sponsorship Of ‘American Idol’ (EXCLUSIVE)

Coke adds life, or so a popular 1976 ad slogan for the popular soda once bragged. It has certainly done just that for “American Idol,” the venerable Fox program that has long featured big cups festooned with logos for various drinks made by Coca-Cola laid out on its judges’ table. What Coke adds, however, it can also take away.

After more than a decade as one of the top sponsors of “Idol,” Coca-Cola is cutting ties to the program, the company said in a statement. Coca-Cola will instead work with Fox in other ways. “After 13 years, we feel it is the right time for the Coca-Cola brand to venture into new spaces and pursue other opportunities to connect with teens and leverage music as a passion point,” the Atlanta beverage company responded when asked why it was leaving the show.

Coca-Cola departs as Madison Avenue has noticeably cut its support of “American Idol,” a program that holds a significant place in the medium’s history but which has suffered significant ratings declines. In 2012, advertisers spent nearly $781.9 million on the show, according to Kantar, a tracker of ad spending. In 2014, they committed $394.7 million – representing a drop of 49.5% over just three seasons. Coca-Cola spent about $49.1 million on “Idol” in 2012, Kantar said. In 2014, it spent about $16.3 million. Ford Motor, another longtime “Idol” advertiser, spent $76.3 million in 2012, but $27.3 million in 2014.

AT&T, which used “Idol” for years to promote text messaging, left the show in January. Ford will return in 2015. Ford intends to  “continue to support some of the biggest shows on the network, which includes American Idol,” the company said in response to questions about its support of the show. “However, our relationship with Fox goes much deeper than any individual program,” it added. Ford this season has been attached to “Gotham,” and has had a presence in “New Girl.”

Coca-Cola’s disclosure surfaces just weeks before “American Idol” is set to launch its 14th season on Fox  in January. Fox has already said it intends to air fewer episodes of the show, a signal the program can no longer carry the network as it has in past years, when it took up two nights each week. Coke’s absence will give Fox the chance to offer placement in the show to other marketers, according to a person familiar with the situation, and the network is currently in talks that could give a sponsor an appearance in some of the live episodes slated for broadcast later in 2015.

The company that negotiates Coca-Cola’s ad placements recently advised its clients to find new ways to mix their ad messages with music. MediaVest, a large media-buying firm that works for Coke and Procter & Gamble, among others, released a study in June suggesting advertisers stop linking ad messages to music and instead find ways to curate musical experiences for customers.

MediaVest spent a year interviewing more than 2000 U.S. consumers and making use of online discussion groups and ethnographic studies of 8 U.S. markets and found younger consumers thought less of music that was delivered to them in conjunction with traditional commercial message, but would view more positively any party that might offer more information about songs and artists or even deliver experiences associated with music. In 2014, Honda Motor, a MediaVest client, launched “Honda Stage,”a YouTube channel to present original content from top bands and musicians.

Coca-Cola declined to say if it was following MediaVest’s advice. “We cannot confirm additional points on strategy at this time,” said Melina Baetti, a spokeswoman.

“American Idol” remains one of TV’s biggest draws, despite what is a mature age for a TV program. It has been on the air since the summer of 2002, making outsize phenomena out of judges like Paula Abdul and Randy Jackson and winners such as Carrie Underwood and Kelly Clarkson. But its power is on the wane. The show’s 2014 finale was seen by 10.1 million viewers, according to Nielsen,  a decrease of 27%  from the 14.3 million who watched it in 2013, and the smallest audience for the program’s last episode in its history. In contrast, approximately 38 million tuned in to watch Ruben Studdard defeat Clay Aiken for the win in the show’s second season.

Coke’s departure brings to an end one of the best-known ad placement deals of modern times. When the company’s red cups were spotted on the judges’ table in 2002, it signaled a new era: TV networks, sensing the disruption to advertising caused by the rise of the digital video recorder, began to allow sponsors prominent entry in reality programming and sports broadcasts. Coca-Cola even transformed the show’s “green room,” where participants could hang out, into a “red room.”

Within five years, advertisers had gained access to dialogue in scripted dramas and comedies on dozens of networks, echoing the medium’s earliest days when sponsors actually owned programs like “Kraft Television Theatre.” Coca-Cola’s decision to appear in “Idol” was “a huge risk,” David Raines, the vice president of integrated communications for Coca-Cola North America told the Atlanta Journal-Constitution in September of 2002, “but it paid off.”

Ad buyers think “Idol’s” age, in combination with other factors, like a glut of similar shows that have cropped up in the show’s wake over the years, will prevent it from rebounding – unless new celebrities at the judges’ table renew its allure. “Unfortunately, we don’t expect ‘Idol’ to bounce back,” said Billie Gold, vice president and director of buying and programming research at Carat, a large ad-buying firm.

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