Cola Wars

“Comparative advertising is an advertisement in which a particular product, or service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it”

Comparative advertising puts a new spin on the fundamental ideas of marketing: rather than promoting their good bits, firms simply emphasise why they are better than the market’s alternatives. Simple, right? Or perhaps not so. Different countries have their own regulatory methods to prevent companies from using the technique, specifically with divergence over trademark regulations and allowing companies to directly name their competitors. In the United States, comparative advertising is permitted, and in fact encouraged, by the Federal Trade Commission (FTC). Not only can you reference your competitors, but you can be downright rude about them. Apparently it is a source of important information to consumers in allowing them to make informed choices in their purchase decisions.

In the UK, while the law has been relaxed, there remains a much firmer stance on the topic. Only recently have companies no longer needed to prove that the products compared are “identical or substantially equivalent”. This is all thanks to a new approach by the European Court of Justice. Since a directive in 1984, companies are allowed to use comparative advertising, subject to a few key requirements: the advert must not be misleading, create confusion, discredit or denigrate third party trademarks, take unfair advantage of the reputation of a trademark or present goods as imitations of goods bearing a protected trademark. These seem like important limitations, but are they really? These points are arguably overly broad, and would be difficult to apply to facts in a court of law. There is some question of the extent to which the other companies’ trademarks can be used, such that the name-dropping must be “indispensable” and therefore not a vital part of the campaign. But looking at the adverts that are out there, this clause has practically been ignored. Clearly the directive is more of a guideline than a clear restrictive system.

Sorry, too lawyer-y, moving on. There is an argument for the use of the technique – it can be hilarious, and perhaps effective. We all know about the Mac v PC war (with Mac clearly the hare to PC’s tortoise) but did you know that it originated from comparative advertising? However, many studies have shown that the advertising technique is ineffective, and lacks credibility. Consumers are too aware of, and sympathetic to, the implications of slagging off another brand. However, the method is still used, and can be incredibly funny.

The Cola Wars

Perhaps the most iconic example of comparative advertising is between Coca Cola and Pepsi, the two companies having competed for a majority market share since the middle of the 20th century. After 1980 the advertising battle became so heated that it was nicknamed the “cola wars”. Here are our favourite bits:

The Pepsi Challenge: a marketing promotion that took the form of a blind taste test. At malls, shopping centres and other public locations, a Pepsi representative sets up a table with two blank cups: one containing Pepsi and one with Coca-Cola. Shoppers were encouraged to taste both colas, and then select which drink they preferred. The representative would then reveal the two bottles so that the taster could see which they preferred. The results showed that most Americans preferred Pepsi over Coke (ouch).

The Space Race: In 1985, Coca-Cola and Pepsi were launched into space aboard the Space Shuttle Challenger on STS-51-F. The companies had designed special cans (officially the Carbonated Beverage Dispenser Evaluation payload or CBDE) to test packaging and dispensing techniques for use in zero G conditions. Ridiculous or what?

Some more recent examples:

Pepsi making fun of Coca Cola’s icons, the polar bear and Santa:

And a printed ad:

 

joy_of_pepsi_straws

The Cola wars are probably the most iconic examples of comparative advertising, but my favourite has to be the campaign ran by the National Australian Bank in 2011, where NAB broke up with its competitors: “It’s not you, it’s me”

In 2011, the National Bank of Australia embarked in a massive guerrilla marketing campaign to attempt to seduce consumers away from its competitors.

It all started with a seemingly banterous Valentine’s Day tweet on Nab’s official twitter account. It read: “Soo stressed out! Have to make a tough decision and I know I’ll probably hurt someone’s feelings. Arrrgggh”. The tweet gained thousands of re-tweets, as people thought it was a mistake. Australia’s greatest marketing campaign was underway.

The next day saw NAB release an elaborate mix of marketing media, announcing its break up with its competitors. The campaign centred on an open letter to Commonwealth, ANZ and Westpac, where NAB explained that it was moving on by abolishing fees, offering better interest rates, improving access to ATMs, and supporting local businesses when the other banks wouldn’t. The letter was published in all the major national newspapers, and an enlarged copy was strung out on the side of NAB’s headquarters. The campaign was supported by a number of other marketing media, including banners strung from helicopters, posters around the cities and light projections on the sides of buildings. They really went all out. They even hired actors to end things with their partners in public spaces. Chalk drawings on the street spread around Australia, and even a pianist was hired to play sad breakup songs outside the other banks’ headquarters.

The endgame: a website prompting costumers to break up with their own banks and join NAB, who waived its switching fee for changing loans and even offered to pay the fees charged by the other three big banks to assist costumers in switching their mortgage to NAB. Clever.