In 2016, Coca-Cola Japan released Coke ON, a mobile app designed to upgrade digital marketing to the next dimension. In addition to the perk of getting beverage coupons by collecting purchase points, the app drew interest with its unique promotional campaigns including product sampling linked to temperature, generating 4 million downloads in just one year.

Where is Coca-Cola Japan's digital marketing heading in its evolution? We interviewed Yosuke Toyoura, director of IMC iMarketing, to learn more.

Take us through the brief history of digital marketing at Coca-Cola Japan.

In 2007, the Coca-Cola Park website launched to promote wider recognition of Coca-Cola products and to build a fanbase for Coca-Cola through games and other content. In 2009, we began managing official accounts on Twitter, Facebook, mixi and other social media networks. And in 2013, we set up the Social Engagement Center to research and monitor consumer reactions to the Coca-Cola, Georgia and Aquarius on social media. We also introduced various changes in promotional strategies.

Yosuke Toyoura, iMarketing Director, Coca-Cola Japan

Kazufumi Shimoyashiki

What did you do in the beginning?

When we began in 2013, we looked for accounts tweeting about Coca-Cola and gave away original images to them, in order to build a base of avid fans. Although this was deeply appreciated, this promotion had limited effectiveness because the communication was one-to-one. For this reason, we switched to a policy of implementing measures that trigger greater interest, in other words, creating buzz.

A recent successful example was the promotion for "Fanta Lemon +C" featuring actor Masaki Suda.

In planning this project, I looked into the differences in the roles of TV and social media. TV remains the most powerful media in building product recognition to this day. However, there are a lot of commercials that increase product recognition, but do not have enough influence to trigger subsequent action, leading to product purchase or dialogue with friends about the product. That's why I decided that a more proactive approach to trigger action is necessary in social media. This led to "lottery" using Twitter.

Do you mean selection of winners by lottery?

That's right. Twitter users who follow Fanta and retweet can watch a video where Masaki Suda draws a lot. If a "win" is shown at the end of the video, the user wins a Fanta Lemon +C. Although there were tens of thousands of retweets, most people lose because only 1,000 users win. For people who participate in the lottery to enjoy it even if they lose, we created many variations of the video. Depending on the video, Mr. Suda says "you lose" in different ways. This led to many people drawing lots each day, resulting in roughly 1.3 million retweets in total.

The variety in the videos broke the retweet record by a brand for two consecutive weeks.

Kazufumi Shimoyashiki

That's astounding! You must have top-class expertise in Japan for spreading information via social media.

Thank you, but no. Notwithstanding this, it is incredibly difficult in every project to encourage users to take action, rather than just viewing a video. There is no absolute solution. As social media technology is evolving each year, we can't do promotions we have already done. Each time, we need to brainstorm ideas to be used in creative productions, including videos, to boost the success rate.

So, we released the mobile app Coke ON as the next phase in digital marketing. Coke ON functions like a purchase point card. It gathers purchase points each time a user buys a Coca-Cola beverage from a vending machine.

So it’s a mix of digital marketing with vending machines. Why was the app developed?

There were two factors. One is the slow decline in the number of users visiting Coca-Cola Park, which I mentioned earlier. In the deliberations on how to resolve this problem, we decided that consumers wouldn’t be interested in any stop-gap improvement measure, and that we needed a totally new service on a new Coca-Cola platform. The other factor was the moderate pace of decline in vending machine sales. This is caused by many social factors, including the increase in the number of convenience stores, consumption tax hike, and so on. When thinking into how to resolve these two factors, we came up with an experiment of distributing IC cards at locations near indoor vending machines, which enable users to gather purchase points when purchasing vending machine products with the card. We added perks, such as giving away one bottle for every 15 or 20 purchased.

Analysis concludes that "the purchase point card scheme is easy to understand and is readily accepted by consumers in a wide range of age groups”

Kazufumi Shimoyashiki

How did it turn out?

We saw a clear rise in sales for vending machines with this promotional scheme. When we realized this, we felt like a light shone through in reviving the vending machine business. Naturally, we decided to scale the promotion. However, we wouldn't be able to distribute IC cards each time. So we decided to turn this function into a smartphone app.

So, the app became the new digital platform to replace Coca-Cola Park. But we understand that Coca-Cola had never developed mobile apps. How was this done?

More than 3 million apps have been released, to date. Of these, most people have around 30 apps installed on their smartphones. But less than 10 are used on a daily basis. For Coke ON to succeed, it needed to be one of those 10 apps. We conducted exhaustive analyses of the apps used by many smartphone users. We concluded from our findings that we needed to limit the functions of the app to three elements, namely, clear benefit, convenience and entertainment. Coke ON satisfies these three by offering purchase points that can be exchanged for products (clear benefit), easy access to the service by simply placing the smartphone over the reader (convenience), and fun with limited-period campaigns (entertainment). In addition to these, we built the app around a concept, offering services only found with Coca-Cola.

You weren't interested in creating an app that only offers purchase points?

We thought that a simple app like that wouldn’t encourage users to use it regularly. At the same time, there would be no point if people couldn’t use it whenever they wanted to. So, we installed communication devices for Coke ON in vending machines alongside app development, making existing vending machines "smartphone-ready" for collecting purchase points. As of April 4, 150,000 smartphone-ready vending machines were active.

Coke ON, released in April 2016, is only available only in Japan.

Kazufumi Shimoyashiki

What response have you seen to Coke ON?

Over the past year, the number of downloads has increased steadily each day. Several thousand people have downloaded the app each day, even when there was no promotional campaign underway. We felt this number proved the potential of the service. We were truly pleased to find users recommending Coke ON on social media.

Wasn’t there a memorable promotional campaign using Coke ON last year?

Yes. Last summer's Aquarius sampling campaign was organized to prevent heat strokes. In areas where the temperature was over 35 degrees Celsius, we issued coupons for free Aquarius. By placing the coupon shown on Coke ON over the smartphone-ready vending machine reader, users could exchange the coupon for a free Aquarius. This promotion was something that we could only do with a smartphone app using geolocation data.

During the 2016 Olympic Games in Rio de Janeiro, we gave away Coca-Cola coupons each time a Japanese athlete won a gold medal. Before this, we were only able to tweet congratulations to the gold medalists. This time, we were able to share the joy of the moment with users drinking Coca-Cola. The breakthrough brought on by the Coke ON platform was the creation of many ideas realized by integrating the vending machine into the real world with a digital app. This is something that wouldn’t be possible if restricted to cyberspace. Our range of innovation expanded considerably when we broke out of that shell.

How many downloads have you seen?

We have more than 4 million downloads. When we organized a major promotional campaign for Georgia last December featuring Takayuki Yamada in both TV commercials and 40 web-exclusive videos, downloads increased rapidly and continued to grow steadily after that.

Wow, 40 videos!

We made a wide variety available, such as portrait and landscape versions and videos of varying lengths, such as a six-second version and a 50-second version. By offering this range, we examined the type of video effective for each media... that is, what would lead to app downloads. We tracked whether users who downloaded the app actually purchased products. In digital advertising, we can see all of the results on the same day and repeat tests with great speed.

You found that the most effective versions were those that were released on Facebook, YouTube and similar media.

We also found that the most effective version was different for each media. For this reason, we were able to generate maximum results by releasing different versions that were optimized for each media. We are also thinking of using these data analysis findings for advertising communication outside the web, such as in TV commercials. We can test a number of patterns first on the Web and then confirm with Coke ON data which is best at stimulating purchases. We can then use the video found to be most effective for a major campaign such as a TV commercial. We think we will be able to organize creative production measures based on data.

It's interesting to know what drives sales, rather than depending on ambiguous indicators such as 'positive viewer response' to a TV commercial. We may even see the integration of digital elements into all types of marketing in the future.

When it happens, I think departments such as iMarketing will disappear. I am aware of the threat that this job could disappear if we do what we did last year again. In the past, the digital sphere was thought of as something totally separate from others. But today, the media team at the division next to ours also deal with digital media.

I am constantly thinking about what digital marketing truly is. It doesn't consist only of setting up an account on social media and uploading content. That doesn’t contribute to the business. We need to digitize existing business and marketing models. As we did with the introduction of the Internet of Things in vending machines, we need to add new digital models to business already being conducted, or replace such business with digital models. I believe that is the job we will be doing in the future.

Yosuke Toyoura: Joined P&G Japan in 2001 and took charge of its digital marketing operations. Joined Nike Japan in 2009, where he led digital marketing and moved into consumer communication development covering advertising creative production, media and digital technology in the running category. He joined Coca-Cola Japan in 2013. As Director of iMarketing, he is responsible for owned media, social media and other areas of digital marketing.

Kazufumi Shimoyashiki