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Who even needs ads anymore? More companies go direct

In the final moments in the series finale of Mad Men, fans were shown a classic Coca-Cola ad that is legendary in the advertising world. While there is plenty of debate surrounding the show’s plot -- namely, Don Draper’s all-knowing grin -- and how the ad came to be in creator Matt Weiner’s fictionalized world, we’re going to dive into the truth of the real thing. So prepare for your watercooler knowledge with these five things to know about the real-life “I’d Like to Buy the World a Coke” ad. 1. It was created by an ad man from McCann Erickson. The ad agency gets a bad rap on the show, but in real life the company was -- and still is -- a major force in the advertising world. It’s star employee? Not Don Draper, but creative director Bill Backer who created the ad for Coca-Cola. Backer told CNN Money that he hasn’t seen Mad Men past season two and has no opinion on the finale. "It had become more about the tangled lives of the people and less about the industry they were working in and presenting the ads in ways that was attention-getting, and hopefully uplifting and fun to watch,” he revealed. Oops, someone’s not a fan of Don’s escapades. Thanks, Don. About time you came up with a good idea. https://t.co/0IdUE4KFoR #MadMen #MadMenFinale— McCann (@McCann_WW) May 18, 2015 2. The ad was not inspired by a hippie commune. While Don’s meditative state at the end of the series certainly suggests a moment of Nirvana, which may have inspired the hit ad, the real story could be nothing further from the truth. After Backer’s flight to London was forced to land in Ireland, Backer became inspired by the passengers who bonded over being grounded. Backer explains that they were “laughing and sharing stories over snacks and bottles of Coca-Cola,” which became the basis for the ad’s concept: "In that moment [I] saw a bottle of Coke in a whole new light... [I] began to see a bottle of Coca-Cola as more than a drink that refreshed a hundred million people a day in almost every corner of the globe. So [I] began to see the familiar words, 'Let's have a Coke,' as more than an invitation to pause for refreshment. They were actually a subtle way of saying, 'Let's keep each other company for a little while.' And [I] knew they were being said all over the world as [I] sat there in Ireland. So that was the basic idea: to see Coke not as it was originally designed to be -- a liquid refresher -- but as a tiny bit of commonality between all peoples, a universally liked formula that would help to keep them company for a few minutes." 'MAD MEN' SERIES FINALE: Find Out What Happened to Your Favorites in the End! 3. Backer’s pitch almost didn’t land. When Backer pitched the idea to his client, producer Billy Davis, it was met with a tepid response. As Coca-Cola notes in its history books, Backer had to sell him on the idea of buying a Coke for everyone: Davis slowly revealed his problem. "Well, if I could do something for everybody in the world, it would not be to buy them a Coke." Backer responded, "What would you do?" "I'd buy everyone a home first and share with them in peace and love," Davis said. Backer said, "Okay, that sounds good. Let's write that and I'll show you how Coke fits right into the concept." Once the concept was OK’d the trouble didn’t stop there. The shoot was plagued with rain, which washed out two productions and pushed the budget to $250,000 -- an unheard of cost for a commercial. And then Coca-Cola bottlers were not a fan of the jingle. Luckily, the public overwhelming disagreed. 4. The jingle was a chart-topping hit. The ad was an instant hit when it was released in July 1971. And while clearly a jingle, consumers started calling into radio stations to hear the song. Eventually, two folk rock groups -- The Hillside Singers and The New Seekers -- recorded a new version of the song, called “I'd Like to Teach the World to Sing (In Perfect Harmony)." Both versions, which dropped the Coca-Cola references, became major hits. The Singers’ version climbed to No. 13 on the Billboard Hot 100, while the Seekers’ version surpassed it, hitting No. 1 and eventually selling 12 million copies. 5. The hit ad has been recycled by Coca-Cola. Why let a good thing go to waste when it can be repackaged and resold to a new generation? Twenty years after the original ad came out Coca-Cola revisited the ad for Super Bowl XXV. In the updated version, several of the original singers, with their kids, sing a medley of the original song and the brand’s current jingle, “Can’t Beat the Real Thing.” It’s also been used by the beverage company in numerous campaigns since then.

Coca Cola (KO) ended up with a surprise starring role in the final moments of the AMC Networks' (AMC) critically-acclaimed series "Mad Men," as the last scene was the soda company's iconic 1970 "Hilltop" ad playing for millions of viewers.

Viewers got curious about the real origins of the commercial, and searched the web for more information. Whether they used a search engine or clicked from a link in stories at the New York Times, BuzzFeed or Entertainment Weekly, many ended up learning what really happened from an article Coke itself commissioned a few years back. No, the fictional Don Draper didn't return from a California yoga retreat and write the spot. It was real life adman Bill Backer who concocted the idea while his plane was fogged in in Ireland.

The 2012 article, written by a Coke company archivist, recounts the making of the now-famous "I'd Like to Buy the World a Coke" jingle and the shooting of the commerical itself.  It's just one piece produced as part of Coke's Journey web site, a direct effort by the brand to take control of its own narrative instead of leaving the storytelling to reporters, editors and analysts in the media.

Coke, of course, is hardly alone among brands large and small that are creating the kind of original content that used to be mainly the function of the news business. And now they're increasingly creating their own web sites, like Journey, to attract more readers.

The high-end department store Barneys is producing its own culture and fashion magazine called The Window. Adobe (ADBE) is penning advice for chief marketing officers at CMO.com. And the fodder goes well beyond traditional newspaper-like stories. Kraft (KRFT) is feeding hundreds of recipes into the popular social network Pinterest. The Sour Patch Kids candy brand is making videos for Snapchat. And old-time corporate raider T. Boone Pickens even has his own podcast.

Blurred lines

The corporate push comes as the walls between news and advertising are weaker than they've been in generations. From old-line news sites like the New York Times (NYT) to upstarts like BuzzFeed, the focus is on so-called native advertising, ads that look and feel more like news articles. It's also an emphasis at Yahoo (YHOO), the parent of Yahoo Finance. As companies perfect the art of making content for their own web sites, they can also use the same material for native ad spots.

But it's not likely that news organizations in the end will be helped by the corporate content push. Instead, the stories, videos and recipes more frequently bypass news sites altogether and end up being spread by the new kings of distribution in the digital age: social networks like Facebook (FB), Twitter (TWTR) and Pinterest.

Back in the 1970s, Coke had to pay huge sums to place ads on network television or in national magazines to reach millions of their customers. Today, the Internet has smashed the media's distribution monopoly, giving brands lower-cost and more direct pipelines to customers. And most brands pay the networks to promote their content instead of just relying on fans to spread the word.

It's obvious in the ad sales numbers from both industries. From 2010 to 2013, digital ad sales at newspapers rose from $3 billion to $3.4 billion, according to the most recent figures available from the Newspaper Association of America. Meanwhile, Facebook's ad revenue jumped from $1.9 billion to $7 billion over the same period.

"We see over and over again that content outperforms advertising," says Julie Fleischer, Kraft's senior director of data, content and media. "Our advantage is that we’re also a leading publisher in our own right."

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The corporate content efforts typically cost considerably less than the amounts spent by news organizations to cover the world. Coke runs its Journey site with six core staffers in Atlanta. Adobe's CMO.com site has two full-time editors and a budget of less than $1 million a year. The sites rely heavily on freelancers and content contributed free by employees or outside authorities. Some also use outside agencies that have cropped up just to meet the need for in-house articles, like Contently, a New York-based start up.

An increasing number of students who used to go into journalism are now working directly for companies or their outside agencies, says Ava Seave, a media business consultant and an adjunct professor of journalism and business at Columbia University. "There are more and more of these sites," says Seave. "It's a basic economic model -- supply and demand." The trend has even been parodied on the HBO show "Girls," when the main character, Hannah Horvath, spent much of the third season writing native ad content for GQ magazine.

Content vs. advertising

The basic strategy is sound. Companies with well-known brands have found that creating their own content is a smart way to get more value out of that popularity. Kraft gets one billion views a year of recipes on its site, the company said. On social sites, Kraft is the third-largest presence for the food category, trailing only the Food Network and Martha Stewart. When Kraft features a recipe in the lead spot on its recipe site, it gets about four times larger an audience than the same recipe gets when highlighted in a banner ad, Fleischer says.

Brands can also leverage their connections with the most addictive source of social network traffic available: celebrities. Barneys' fashion and culture site, The Window, created a series of videos of celebrity customers pretending to be locked in the store overnight. NBA point guard Russell Westbrook played hoops and grabbed sneakers. The stars of VH1's "Barely Famous," Erin and Sara Foster, frollicked through the Beverly Hills Barneys in another 4-minute episode.

Barneys' online fashion and culture magazine called The Window.
Barneys' online fashion and culture magazine called The Window.

Customers who read The Window spend 40% more at Barneys than the average customer, Charlotte Blechman, executive vice president for marketing and communications at the company, says. The content may appear on the web site, on social networks and even on screens in stores, she says. "Everything we do is very holistic," Blechman says.

The new content is also showing up in new places. Sour Patch Kids candy, owned by Mondelez International (MDLZ), decided last year that the best place to reach their teenage customers was on Snapchat, via the messaging service's new video stories feature.

"We want to connect with teen consumers in a way that's authentic to them," says Farrah Bezner, marketing director for the candy line. "We definitely saw Snapchat as a place that was going to work with our audience."

Sour Patch, too, wanted to use celebrities to enhance the popularity of its content, but it needed to find someone attractive to its teen audience. The company picked Logan Paul, a teen whose stunts and pranks had drawn huge audiences on Twitter's Vine short video site. They created videos for Snapchat showing Logan and a crew of costumed Sour Patch characters doing "sweet and sour" pranks. Videos from the weeklong campaign were watched millions of times and had more than a million mentions on other social network platforms like Twitter, Bezner says.

Despite the huge growth in corporate content, and its pull on advertising dollars, however, the brand-originated stories won't replace the need for real news, thus guaranteeing at least some continuing audience for news sites.

"This doesn't eliminate the need for journalism," says Forrester analyst Ryan Skinner. "If you're looking for coverage of a car crash, no one is going to read what Ford says about it."

(This story was updated on May 27, 2015 to correct the spelling of Farrah Bezner's name.)