Over the last six years, Coca-Cola spent an average of $4bn a year on advertising worldwide. However, the impressive ad budgets of one of the world’s largest advertisers had been slashed amid the COVID-19 pandemic.
According to data presented by Trading Platforms, Coca-Cola ad spending plunged by $1.5bn year-over-year and hit $2.77bn in 2020.
Advertising Expense Dropped by 35% in a Year
Coca-Cola (KO:NYSE) has a long history of innovative and appealing advertising campaigns, going back to the art of American painter Norman Rockwell to the iconic polar bears of Christmas advertising. In 2014, the Coca-Cola advertising expense amounted to $3.5bn, revealed the Statista data and the company’s 2020 annual report. Over the next two years, this figure jumped to $4bn.
Statistics show 2019 was a record year for Coca-Cola ad spending, with the advertising expense rising to $4.25bn. Almost 20% of that value, or $816 million, was spent in the United States, down from $913m in 2018.
However, the company has been severely impacted by the closure of restaurants, bars, cinemas, and stadiums amid the lockdowns, which make up a significant proportion of its sales. Moreover, due to the COVID-19 crisis, people stopped impulse buying of soda they usually did in convenience stores.
In March last year, Coca-Cola warned advertisers that from April and until further notice, they are putting commercial advertising for Coca-Cola and all other brands on hold. As a result, the company`s advertising expense plunged by 35% in 2020 and hit the lowest level in years.
Revenue Down by $4.2bn YoY Amid COVID-19 Crisis
With a brand value of almost $70bn, Coca-Cola was by far the most valuable soft drink in the world in 2020, beating out competitors, like Red Bull and Pepsi. Despite that, the company’s revenues dropped significantly amid the COVID-19 crisis.
Over the years, the Coca-Cola Company’s net revenues increased significantly, growing from $28.86bn in 2007 to a record of $48bn in 2012. Still, by the end of 2018, this figure dropped by almost 30% and hit $34.3bn. Statistics show that 2019 witnessed a recovery, with revenues rising to $37.3bn, nearly a 9% increase in a year.
However, the COVID-19 caused a substantial hit, with net revenues falling by $4.2bn YoY to around $33bn in 2020. Almost 35% of that value was generated in North America. Europe ranked as the second-largest Coca-Cola market, with a 16.8% revenue share. Asia-Pacific and Latin America followed with 12.8% and 10.6% share, respectively.