Coca-Cola (NYSE: KO - News) has agreed an alliance with Apple Computer (NASDAQ: AAPL - News) to promote its iTunes digital music service on the soft drink company's website in Europe.

The partnership is part of a broader push by the drinks group to find new ways to communicate with young consumers as traditional forms of advertising lose their potency in the multi-media era.

Coke last week launched an interactive website that allows people to submit homemade video clips and photos, taking its cue from websites such as YouTube and MySpace.

The initiatives come weeks after Wal-Mart (NYSE: WMT - News) , the US discount retailer, launched an online competition for teenagers to create their own web pages linked to its corporate site.

Companies are under pressure to develop sophisticated online marketing strategies to communicate with a new generation of consumers who spend as much or more time on the internet than they do watching TV.

"For Coca-Cola, it is clear that as consumers spend more time online and we need to find ways to become an important, relevant part of their lives," said Tim Kopp, vice-president of global interactive marketing for Coke.

Under the agreement with Apple, Coke will link its website to the iTunes site and give away millions of free music downloads on its drinks in the UK and Germany.

The alliance with Apple signals an end to the group's ambition to develop its own presence in the online music market. The company launched its own music download site – MyCokeMusic – in Europe in 2004 but the service was closed this month amid fierce competition from iTunes and others.

Chris Burgrave, managing director of marketing for Coke in Europe, said the company had decided it made more sense to offer music in partnership with iTunes.

For Apple, the deal is the latest in a series of partnerships with consumer brands, designed to raise awareness of its iTunes service and iPod digital music players.

In May, Nike and Apple launched a range of products that integrate the iPod into sports clothing – aimed at people who listen to music while exercising.

Companies including Gap and Pepsi, Coke's main rival, have also run promotions offering free iTunes downloads as prizes.

Apple declined to say whether its deal with Coke could be extended to the US and elsewhere or whether it precluded further promotions with Pepsi.

The music-giveaway by Pepsi in the US last year was blighted by glitches and generated far fewer downloads than expected.

Coke will launch its partnership with iTunes this month by giving away 70m songs with its products in the UK and a similar promotion in Germany.

Eddie Cue, vice-president of iTunes, said it was the deepest alliance of its kind involving iTunes.