Pepsi Forgets Super Bowl Advertising And Goes Super Social Media Marketing

“The recession has accelerated systemic changes in the media landscape: Audiences are fragmenting, taking more control, and seeking inexpensive or free alternatives. Combined, print and television will lose almost $17 billion in US ad spending in 2008 and 2009. Newspapers  down (-29%) and Broadcast TV  also down (-23%)” says Forrester Research.

While it may seem to be a buyers’ market, this media meltdown risks being highly disruptive to campaigns and partnerships. Marketing leaders must work with media companies and agencies to reinvent integrated marketing, blending content with messages and extending channels not for reach, but for deeper audience relationships.

Another comment on a recent Forrester Research Blog saysSocial Media changes everything, Social Media alters the playing field for everyone within the enterprise; formerly successful strategies and tactics are being challenged, while old and tired methodologies are getting new legs and as we see, Pepsi is using Social Media to give new energy to cause marketing“.

So What did ABC news have to say about Pepsi, the Super Bowl and social media?

Pepsi

“This year for the first time in 23 years, Pepsi will not have ads in the Super Bowl telecast. No Cindy Crawford, Britney Spears or Justin Timberlake. Instead it is redirecting the millions it has spent annually to the Internet. Pepsi has chosen to give away over $20 million in a social media play it is calling The Pepsi Refresh Project, debuting in 2010.

In Super Bowl ads from 1999 to 2009, Pepsi spent over $142 million to encourage consumers to drink the Pepsi brand. Pepsi’s decision to pull its advertising from the Super Bowl telecast and concentrate on its Social Media strategy to try and create a movement will be the largest and most visible showdown between broadcast media and the Internet to date.

The Pepsi Refresh Project will launch on Jan. 13 with a Web site where people can outline their projects to refresh their communities to make a better world.

Visitors to the site can start voting on Feb. 1. Pepsi estimates they will fund thousands of projects spending in excess of $20 million dollars and hopes to start a movement where others will begin funding community projects in the same manner.

On the other hand, if the new strategy gains traction, Pepsi will have increased sales while spending less on the brand than it has in past years and will have a head start on its competition in the new media.

Some industries including automotive in recent years have made the decision to cut broadcast spending in favor of greater spending on the Internet and social media. According to a recent survey conducted by Forrester Research, more than 50 percent of marketers are increasing their spending in social media. Advertisers view social media as important because online they can seek out people who have an affinity for the brand and engage them in a meaningful discourse that lasts longer than 30 seconds. Many times these people pass along information to their friends. Online tools give marketers the ability to track the “pass alongs.” Communication can be more frequent and the consumer can share with the advertiser information such as what other information they would like to have and what actions they would like for the marketer to consider”

So what are some of the other major brands implementing Social Media?

This is what  Media Post had to say on General Motors

General Motors

“According to a new report from Borrell Associates monitoring the pulse of local ad spending by U.S. auto dealers, dealer associations, and manufacturers, US auto manufacturers will increase their online local ad spending by 14% in 2010, while new- and used-car dealers will increase their ad spend online by 8.6%. The total effect will result in an 11.4% increase in new-vehicle online ad spending next year.

Overall, Borrell Associates predicts that US ad spend for new cars will rise to a total of $19.2 billion from the low of $18.4 billion in 2009, experiencing a 4% growth rate across all media. These numbers represent declines from 2008 spending, following a precipitous drop in automotive ad spend of 31% in the first half of 2009, during which  Chrysler and GM declared bankruptcy and the recession forced a significant decline in new auto sales.

Online ad spend, says the report, which grew only 5.2% in 2009, will likely surpass all other media for new-vehicle advertising next year, driven by email, social networking and especially streaming audio and video campaigns, which will grow significantly.

Borrell says in the report that “Revenue from display banners, pop-ups and classifi­ed listings is dropping 20%  this year, while spending by auto marketers on email and social networking campaigns is growing by 20%; a cross-over is expected next year, but it is streaming audio and video that will show the most growth this year and is positioning itself for “break-out” growth in 2010.”

And what about some other major brands and their use of Social Media

Toys R Us

This holiday season, Toys “R” Us developed a Facebook page that grew at the astounding rate of between 40,000 and 95,000 fans per day after its late November launch.

Best Buy

Using Social Media to improve its customer support in new ways

Starbucks

Embracing consumers’ ideas and driving innovation and loyalty.

Meanwhile, Pepsi will be leading an army of bloggers, texters and tweeters as it attempts to redefine the marketing game. I, for one, want a front row seat to see if Pepsi can increase the pace of change of the use of social media by marketers

So is 2010 the tipping point for traditional mass media marketing versus new media?

Meanwhile, Pepsi will be leading an army of bloggers, texters and tweeters as it attempts to redefine the marketing game. I, for one, want a front row seat to see if Pepsi can increase the pace of change of the use of social media by marketers

Comments

  • http://www.childrensdayton.org Bethany Deines

    Interesting. It seems that blending community service is the trendiest way for companies to market themselves. Lands End had a brilliant email campaign over the holidays to give coats to the needy all the while earning a discount for a new Lands End jacket.

    Cause marketing seems to be an effective method to gain corporate visibility and appear to be doing something good for the community. Is anyone else concerned that this model reinforces quid pro quo giving? “I’ll only donate something if I get something in return,” seems to be missing the point of real charity.

    What if Pepsi had used that $142 million they previously spent on advertising and simply made grants available for nonprofit organizations? Would those nonprofits not make it known that they received such support from Pepsi? Would it not provide enough marketing benefit to the company?

    I am challenged by the notion that companies use cause marketing to appear that they are being charitable when in reality, they are simply using a strategy to sell more of their product. And in Pepsi’s case, this new plan looks like a cheaper option than what they had. It may engage more people — and if that is the intent, so be it. There certainly can be positive gains from this but in reality, this is not an altruistic strategy designed to really support communities. It is what is is: a new marketing plan.

    Now, the flip side of why I am challenged by this: as a development officer always looking to find new ways to receive support, I hope we can somehow benefit from cause marketing plans, because whatever motivation a company has, the dollars generated will be of benefit to the charities. I just hope they can continue that support once this advertising campaign runs its course.

    • http://www.eastridgeprint.com Renee Malove

      I think “quid pro quo” marketing, as you say, has always been the norm for companies. Sure, they donate, but giving a percentage of sales has a much more mutually beneficial value proposition…and in truth, it allows companies to offer far more support than they might otherwise because they’re able to continue generating revenue. There’s only so much they can give away flat-out, but planning to donate a percentage of sales to charity can exceed that amount based on consumer participation.

  • http://apurvanarang.blogspot.com/ @apurvanarang

    it makes perfect business sense for pepsi to do this… n down the line we’ll see more co.’s following suit..
    as more n more people adapt to the new media i.e. social media more co.’s are going to follow them there.. n it doesn’t hurt as it is much cheaper to interact directly with your target audience via social media.. than advt. on the “idiot box”

  • http://ipenforcement.wordpress.com Nils Montan

    I like it. The rules are clear. Things have to change. The old methods of doing things will not and should not work anymore. Even if Pepsi is doing this for less than completely generous motives, the writing is on the wall.

  • http://www.hightouchweb.com Kim Kolb

    Maybe Pepsi is an industry leader. The thought of them removing that much cash on Super Bowl ads and placing it where most people are is a really smart move. Kudos to them

  • http://rogerewingblog.com Roger Ewing

    Pepsi is taking a refreshing approach to marketing. They are engaging their customers and that is the essence of social media marketing. This piece offers valuable insight into the corporate marketing revolution that is occurring on the web.

  • http://www.mediaadverts.net mediaadverts

    Very nice and informative post will help me a lot in the nearest future. Thank you.

  • Frank Peters

    It’s refreshing indeed, but not new. Pepsi did the same last year.

  • http://www.eastridgeprint.com Renee Malove

    Pepsi is definitely setting a trend, and one we’re going to continue to see as DVR and online television continue to become the norm. The bottom line is, people are tuning out conventional advertising in favor of the more interactive advertising opportunities presented by the web. It won’t be long before advertising on television really becomes a waste of money for these corporate giants. And the fact that they’re redirecting those funds for the greater good just shows that all technology is not, in fact, evil.

  • http://twitter.com/Digitaltonto Greg Satell

    Any ideas why Pepsi’s market share plummeted?