Monday, January 11, 2010

Pepsi dumps buying Super Bowl ads, will give away money instead

A major story hit the advertising industry over the Christmas holidays as Pepsi announced for the first time since the mid 80s, the soft drink maker will NOT buy advertising during the Super Bowl. Instead, Pepsi will invest $20M in a social media campaign called The Pepsi Refresh Project. This campaign looks to fund community-based projects based on several themes such as Health, Arts and Culture, The Planet, and Education.

Needless to say, this is a pretty big marketing shift for one of the world's biggest brands. And it will be interesting to see if other big brands follow suit. Connie Bensen says this move is a sign of three trends converging:

  • Social media marketing becoming mainstream
  • Community-building taking priority over the 30-second ad
  • Brands leveraging multiple channels rather than just television
But the question remains; Will this campaign ultimately build Pepsi's brand and sell more product?

First, there's the execution. Starting on Wednesday, you can submit your ideas for a project that you want Pepsi to fund. We can then vote on our favorites, and the winners will be selected based on number of votes. You can learn more about the selection process here. It sounds like the process will be similar to how Dell utilizes IdeaStorm to crowdsource ideas.

So the thinking is that people that submit ideas and have them approved for voting, will then utilize social sites and channels to promote their idea, and by extension, the Refresh Project, and Pepsi itself. That will likely happen. So the buzz-building element is there, the question becomes, will the buzz be sustainable and beneficial to Pepsi, or more for the project itself?

I think the best chance for this buzz to grow into sustainable passion for the Pepsi brand will come at the local level, in the communities where these projects will be completed. As a result, I think it would be a very wise move for Pepsi to reach out to its evangelists to help with the selection of the projects, and ultimately, their execution.

Think about it, what better way to promote your brand in a positive light than to invest money in projects that benefit communities AND have your most passionate fans be the people that work to complete these projects? THAT would make this project a huge home run for Pepsi, and it will be interesting to see if Pepsi plans on bring their evangelists into the mix to help them with this campaign.

What do you think of The Pepsi Refresh Project? If you had a $20M budget, would you spend it on this project, or buy about 6 Super Bowl ads?


Matt J McDonald said...

Good overview, Mack.

I think this is an interesting move for a couple of reasons.

First, I think the "lack" of attention that Pepsi might experience as a result of not advertising during the Superbowl is negated by all the attention they're garnering now. I'm not sure if this is a good or bad thing, it's just the way it is.

Also, the social project idea is interesting because you can tell they're trying really hard to build buzz around their "we're different, and fun, and socially aware!" brand idea. I don't see this effort as something sustainable, so in reality it just comes off as a long, sponsored project. However, if some good/cool things come out of it, then it's hard to call it a loss.

Paul Chaney said...

I'm sure I don't understand just how huge the implications are, but it's big nonetheless, and a true testament to the power of social media to affect brands. I'm betting we'll see other large corps following suit in some fashion.

Great post Mack.

Mack Collier said...

Good points, Matt. I don't think this will top the immediate (and likely very short-term) buzz that Pepsi would have gotten from SB ads. You just can't top the SB for getting a message out to a mass audience, and on top of that, those ads would have gone straight to YouTube, and if funny, they could have easily gone viral.

But even with all that, I think the Refresh Project has a much greater chance to have sustained benefits for the brand. I think the key will be in how everyone perceives this campaign. Does it come off as these are initiatives that Pepsi honestly cares about and that taps into the core beliefs of the brand, or does it come off that Pepsi simply wanted to throw money at a lot of good causes, and get some exposure for their brand in the process?

This again, is why I think it would be a good idea for Pepsi to involve the people that are most passionate about Pepsi, in the execution of the projects.

Either way, this is definitely something we will all keep our eyes on.

Eric Brown said...

Hey Mack,
This is a really big deal, and we are excited to help get behind it. We are going to be pushing Pepsi's message across the our own blog, as well as the blogs we are managing for third party clients. Our hope is that we get enough folks behind it to influence the votes and the program, and see those fruits in a local project.

It is a testament that The Directional Flow of Marketing Has Changed, and we hope that Pepsi is successful with this marketing initiative.

Mike Billeter said...

I guess my question would be this: is there value in Pepsi dropping five of the six spots in favor of social media, but still running one blatant, "look at what we're doing instead" ad at some point during the Super Bowl? I know that somewhat defeats the purpose, but I feel like it would be an interesting move to say something like...

"Other companies will spend $20 million on ads during this game. We're only going to spend $__ million to tell you this, right now: We want to make a change. We're going to start with The Pepsi Refresh Project. You can help make a difference. Visit to see how."

I know it's sort of the "social media guru calling himself a social media guru" argument of "if you really are one, you shouldn't need to tell people you are," but I feel like Pepsi misses out on an opportunity to cover the all-encompassing media approach so many marketers/advertisers/PR reps are advocating for. If media campaigns need to be well-rounded, I feel like this is a perfect chance for Pepsi to demonstrate this and they might be missing out on a HUGE audience that could help the Pepsi Refresh Project if they don't consider that possibility.

As you point out, Mack, Pepsi can't afford to come off as insincere with this effort, so doing a "we're awesome, look at what we're doing" commercial might not be in their best interest. I just think all-around approach could lead to success on numerous fronts.

Anyone agree/disagree?

Dan Levine said...

Mack, thanks for starting the conversation.

I think it's a win-win for Pepsi. Look at how much buzz they're already creating a month out from the Superbowl. Their $20 mil investment is getting much more sustained and consistent airtime than 6 Superbowl ads. In this sense, bravo.

Is this a risk for Pepsi? Not at all ... or if it is, it's a tiny one. It's not like they're doomed if they don't advertise during the Superbowl. Sure, they may miss out on a spike if they ran effective ads, but they have a luxury that most of us don't have of rolling the dice and taking some thoughtful risks.

In the end, win-win for Pepsi. And as a bonus, by being first to do this, they'll be the go-to case study on whether or not to purchase Superbowl ads. Not bad.

Thanks, Mack. Good stuff.

Dan (@schoolmarketer)

Paola Finocchiaro said...

This is a brilliant idea, and, knowing Pepsi, surely not a copycat of Coca-Cola's worldwide happiness campaign.

As compared to the Superbowl, the campaign as they have planned it will engage disproportionately more a) women and b) young college students. The former represents nothing less than the person who actually places beverages in the shopping cart; the latter represents a demographic segment still willing to switch and experiment with brands, to use them as a statement.

Superbowl audience: middle-aged ? Set in its ways ? Male ? Maybe.

People, and women in particular, will invest a great deal of energy in church & charitable causes. The desire to succeed at fundraising and to contribute to a cause means that they will go to great lengths to reach out to their networks. They will dare things that they would never normally dare to do.

And anyone who has ever participated in a college rally or boycott will have experienced the single-mindedness of the young mind. Need I say more ?

The Pepsi brand will therefore be present in the actions of these two demographic segments when they are at their boldest.

Passive TV ad anyone ?

Spletne Strani said...

I think that Pepsi made a good choice, investing money into something more refreshing that Super Bowl adds. Although we were used to see their adds in the Super Bowl, it's already worth it. People are discussing on blogs about the idea, TV stations are reporting about it.

Mack Collier said...

Mike, I read an article (can't remember which one), that stated that Pepsi didn't think they could adequately explain the Refresh Project in 30 secs, so they weren't going to buy a SB ad for it.

Of course if they had bought the ad, detractors could say 'Ok how many projects could that $3M have funded?'

I think they made the right choice.

Mack Collier said...

Paola that's a great point about reaching young people via this approach versus the SB.

But...Pepsi's social media efforts to date have been focused more on short-term buzz rather than sustained and valuable excitement. Perfect example of this is the 'Pepsi 25' where 25 'influencers' (including myself) were given first peeks at Pepsi's new branding. The end result is that many of the 25 immediately blogged about how cool THEY were for getting an exclusive look at the new branding, and not about how cool the branding itself was.

For reference, here's my post on my involvement:

Anonymous said...

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Mike Billeter said...

Mack -

Thanks for the info on the why/why not of a short ad. Makes sense that they wouldn't want to spend the money on it if they can't explain it in that time. and it's nice to see it's a venture that goes deeper than a "we're saving the world" message or something so simple it's not worth being a part of to begin with.

On the flip side, it makes me wonder how easily they will grab people's attention with this campaign if they aren't able to summarize it effectively in 30 seconds. I'm sure the point is to get people involved long-term rather than simply getting them excited for a "hey, look at what we're doing/did" project, but with people's attention spans as short as they are now, I hope they're able to handle it right and can get to people's cores before they lose interest.

And I definitely agree that detractors would have complained about how they could use the $3 million. Better to stick to their word and just rock and roll with their initial intent.

Thanks for the info and for the discussion, Mack.

hollywoodentertainmentjobs said...

This is really a big deal. I appreciate it. Some time we need to change our business strategy and plan for betterment of our business.

Suzanne Vara said...


This will be a success as they have received more than 3M in free press already over the fact that they are not running ads, beverage ads, that is as Doritos is still running ads.

They are still a big sponsor for the NFL and in creating this contest, there really is not a way in :30 that they could get this across other than using the spot as a driver to the website. Well, they got that in the free press. Extremely smart move on their part to announce that they were not running during SB when they did as the buzz around it is lingering and lingering and no-one is really mentioning Doritos.

This is really about integrating PR with SM and how as a big brand they can effectively have a social media campaign that is driven by the media.

We will miss their beverage spots this year and next year when they jump back into the game, they will be just as successful as the buzz 6 wks out will be that they are back in the game. Brilliant!