The Curious Case of Cristiano, Coca-Cola and Cognitive Bias

All good stories have three acts. Setup. Confrontation. Resolution. All great stories have two. Setup. Confrontation. The resolution is left to the interpretation of the audience. Most viral memes tend to follow a similar two-part structure.

This is precisely what seems to have been the case with the turn of events between Cristiano Ronaldo and Coca-Cola.

Setup: Cristiano Ronaldo moves aside two bottles of Coca-Cola at a press conference earlier this week for reasons best known to him. He points to a bottle of water and says ‘Agua!’; suggesting drink water instead. What seems like a personal preference is now assumed as an alleged endorsement against Coca-Cola (do note that in the past Ronaldo has been an ambassador for the brand).

Confrontation: A forced observation trying to coincide the moment this happened to the slide in Coca-Cola’s stock price and therefore Market Cap by $4B.

Story Headline: Cristiano Ronaldo Snub Wipes Billions off Coca-Cola’s Market Value

Was this true though?

We all love a David and Goliath story. So our minds pit this as a Ronaldo (David) vs Coca-Cola (Goliath) story and start to make assumptions rendering the above false coincidence as a confirmation of the truth. If you’ve come this far in your reading, you’ll realise this isn’t about the debate of influencers and brands (that story btw can’t be written as yet since we don’t have the needed data to come to any useful conclusions).

I digress. Strangely enough, this story isn't about Cristiano Ronaldo or Coca-Cola. It's about us. Our cognitive biases, more specifically our Confirmation Bias. And it's about how we jump to narratives whilst easily ignoring obvious facts. Wikipedia defines it best:

“Confirmation bias is the tendency to search for, interpret, favour, and recall information in a way that confirms or supports one's prior beliefs or values. People display this bias when they select the information that supports their views, ignoring contrary information, or when they interpret ambiguous evidence as supporting their existing attitudes. The effect is strongest for desired outcomes, for emotionally charged issues, and for deeply entrenched beliefs. Confirmation bias cannot be eliminated entirely, but it can be managed, for example, by education and training in critical thinking skills.”

The dip in Coca-Cola's stock price happened at the opening bell on Monday after the weekend. This dip had nothing to do at all with Ronaldo's press conference. The stock closed on Friday at 56.16 and opened on Monday at 55.69 with a day close of 55.55. The dip (taken a day close), was a meagre 1.08%. This dip isn't as massive as the graph makes it out to be and in line with typical day trading movements.

The first news/information/trend on Ronaldo's press conference appeared only on 15th June, a day after the dip (ref. to attached Twitter search on the topic). A simple search would've yielded the needed information. If anything, the stock price went up the following day after the press conference. While it’s never easy to attribute causal relationships of any kind to stock market movement, the most probable reason would’ve been the dividend payout over the weekend. Not Ronaldo. Not the press conference.

Like a self-fulfilling prophecy though, Coca-Cola’s stock price has been on a slight decline (very different from the meme shown) which had little to do with Ronaldo’s action but more to do with the viral story itself. If anyone needs to take credit for this, it needs to be the association of social media meme creators and the initial publications who ran the story without checking their confirmation bias. As of this writing, their stock price is back up by 0.51% from yesterday’s trading.

As marketers, if we want to be taken seriously, it's important for us to get the facts right. Understand business metrics. Understand market movements. The data is easily accessible and right there for us to use. The entire incident was merely coincidental and not the least bit causal. We need to battle our cognitive biases to do true justice to our work and our efforts. Never confuse correlation for causation. But then again, when have we allowed facts to get in the way of a good story.

The author is President – 22feet Tribal Worldwide & Chief Digital Officer, DDB Mudra Group.