Social Media is the New Super Bowl: Pepsi Refresh and What It Means to Marketers

If you track Social Media news, I'm sure you saw the eye-catching headline: "Pepsi's Big Gamble: Ditching Super Bowl for Social Media".  For the first time in 23 years--23 years!--the brand will not be purchasing a Super Bowl spot.  Instead, it is sinking $20M into a Social Media program called Pepsi Refresh. The Pepsi Refresh site will allow people to vote for worthwhile community projects, and Pepsi expects to sponsor thousands of local efforts via this program.

What does this news mean to marketers?  Some potential ramifications (and non-ramifications) include:

  • No, this doesn't mean TV is going away, but it will be fighting for marketing dollars on an increasingly level playing field with Social and Interactive tactics.  Despite the meltdown in traditional media, TV advertising will continue to be a big line item in the marketing budget for top consumer brands, but expect it to continue to shrink as a portion of the overall marketing budget.  Shar VanBoskirk said it well:  "Advertising budgets will decline. But marketing investments won't."  Moreover, as Lisa Bradner points out in her report, Adaptive Brand Marketing, the era of annual TV budgets is ending.  Expect more iterative budget setting based on "test and learn" cycles where the best and most successful ideas can quickly command more funding regardless of channel.   
     
  • Social Media programs don't begin and end with Social Media:  There can be a mistaken assumption that Social Media Marketing means brands being on Twitter and Facebook.  As the Pepsi program demonstrates, Social Media is the means to an end, and not the end itself. 
    It doesn't matter that you have followers, fans, or a community; those are assets, not return.  It is how you use those assets that matters.  In Pepsi's case, they've clearly found a way to gain new followers and fans, but that's not the objective of the program; instead, the brand is putting Social Media to work for a higher goal--making the world a better place and associating the brand with that vision.  
     
  • Social Media measurement = brand measurement:  Do you think Pepsi is going to measure the effectiveness of this program merely by how many fans or page views they get?  They may count retweets, but what are the chances the $20M investment will be evaluated based upon 140-character pass-alongs? 
    The success of this program won't be measured primarily with Social Media metrics (fans, followers, RTs, votes, etc.) but on traditional brand and marketing metrics.  How much PR does Pepsi earn from the program and the funding of thousands of community projects?  How many people hear about the program, and how does it affect their purchase intent for the brand?  How many points increase does Pepsi see when it asks questions such as, "Pepsi is a brand that cares about me and my community?" and "Pepsi is a brand I'd recommend to friends?"  Does the brand see a lift in sales?  Those are the types of metrics that matter in this (or most every other) marketing program.  My peer Nate Elliot points out that you must "choose metrics based on objectives rather than technologies."  
     
  • Another nail in the coffin of merely likable advertising.  Super Bowl advertising has become its own kind of sport.  Shortly after the big game, the scoreboard goes up (USA Today's Ad Meter) and the winning team does an end zone victory dance (agency press releases bragging about the results).  All this hullabaloo implies that ads are entertainment and likability is all that matters, but it is just one element--and hardly the most important--in effective advertising. 
    Pepsi's actions demonstrate a commitment to something deeper than jokey ads.  Pepsi is betting the brand can win by making a deeper connection (consumer involvement versus seeing an ad) for a greater purpose (making the world a better place versus a laugh at the end of a 30-second spot.)   As my online friend Brandon Sutton recently wrote on his blog, "Instead of trying to get clever with your messaging, why not try thinking smarter by understanding how humans think and behave and how your brand fits into the bigger picture of this dynamic?"
     
  • Social 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.  For example, Best Buy is using Social Media to improve its customer support in new ways;  Starbucks is embracing consumers' ideas and driving innovation and loyalty; and, as we see, Pepsi is using Social Media to give new energy to cause marketing.
    Cause marketing is hardly new, but Social Media gives brands the ability to power it in new ways.  Previously, cause marketing tended to be about a company making a donation and leveraging that for PR, advertising and in-bound links. Today, cause marketing can be about embracing customers' values and ideas about how to spend charitable dollars and then energizing consumers and employees to get involved and make a difference.  Social Media offers us new ways to breathe life into this old marketing idea!


Early next year we'll find out how Pepsi's decision to trade the Super Bowl for Social Media plays out, but it's already earned the brand enormous visibility. Articles about their decision can be found on ABC, CNN,NPR, ReutersAP, Wall Street Journal, and others.  Of course, the first brand to dump Super Bowl advertising in place of Social Media marketing will earn headlines; the fifth brand to do so will not.

So, how are you going to use Social Media to give old tactics and strategies new life in 2010?

Comments

PepsiCo: A Case Study In Marketing Blunders

AdAge published an article yesterday headlined "PepsiCo CEO Vows Company Will Learn From It's Mistakes". The article quoted Indra Nooyi, CEO of parent PepsiCo, as saying the Pepsi brand meltdown was "a couple of brand refreshes that didn't work". If it was that casual why did she call PepsiCo's first analyst meeting since 2006 to 'splain the mess?

The article quotes her as saying to the analysts:

1. "some of the stuff I read about I didn't even know about". Hmmm, wonder if she also worked on our brilliant new national healthcare plan.
2. "when you have high-profile agencies these things happen". Who's minding the farm at PepsiCo? Sounds like the tail wagging the dog to me.
3. "the squeaky wheel [makes] the most noise". Huh?

What happened at Pepsi is a classic case of marketing running amok. Someone, somewhere convinced the company that "refreshing the brands" of 1,200 SKUs would be a key growth driver.



Nonsense. Once a brand is mature, or anywhere close to it, the business can generally only be grown through new products, price cuts, deeper market penetration and/or launches into new markets. That Ms. Nooyi ever believed rebranding would be a growth driver in this scenario is amazing, in my opinion.

In addition to the huge waste of shareholder money squandered on the failed tactics, she has set up the company for further, substantial losses due to overly complicated marketing. These losses are often very difficult to find because they hide in accounting buckets like manufacturing variance (changeovers, slower lines); inventory (12 flavors of Gatorade? Anyone at Pepsi ever heard of V. Pareto?); and overhead (just how many brand managers does Pepsi have?).
Perhaps the good folks at Pepsi ought to consider reading this white paper...How Overly Complicated Marketing Destroys Profits...And What You Can Do About It at www.harconllc.com.

Apparently that "brand-y, changey" thing isn't working out as planned...or not planned, as the case may be.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Fantastic post Augie. Truer words were never spoken than "Social Media is the means to the end, not the end in itself." It is blowing my mind, the degree to which this type of social-media-cause-marketing is accelerating. Everyone from Dawn dishwashing liquid to Kellogg's cereal to Subaru to Pepsi and on and on and on is realizing that people choose brands based on both quality and brand/social integrity. Frankly, it's awesome. I found your comments on measurement of this type of initiative particularly helpful. Great stuff.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Thanks Sue. For what it's worth, I could empathize with your recent post, "When Life Trumps Social Media Life" (http://ow.ly/SFnm). Moving to California and starting at Forrester has had a big impact on my blog and Twitter output! Hope life is going well with your new gig.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Great Post Augie,

I think part of social marketing/marketing is getting people to understand outbound marketing vs. inbound marketing, connecting with the huge social networks they are building, and ROI. A majority of the new marketing in 2010 is relatively inexpensive it just costs time.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Good post, and wanted to offer some balance with the traditional ads you refer to as “jokey.” I'm the first to advocate for metrics and communications approaches that embrace new consumer behaviors and media--we've built and agency on this--and I also have seen the great benefit of big-event, exciting, entertaining content in paid media. To be fair, the popularity expressed in the USAToday polls aren't too far of a leap to making the homepage of Digg, Bitly.tv or a top-rated video on YouTube.

It's a sensibility that relates popularity and indices of favorability (likes, positive sentiment, netpromoter, etc.) as a proxy for success that we hope marketers will bring with them to the fluffier metrics of engagement, friending, retweeting and related social behaviors. If marketers can make that transference, perhaps we'll be spared the unsavory practices that will ensue if/when they put number of fans/friends as key performance indicators in SocialMedia much like Web 1.0's click-metrics. When we're reduced to fans and click metrics we advertise to the mouse & fingers rather than to the head and heart.

At least popularity requires stirring the crowd's attention through entertainment, which is a form of value-transfer. At its best, those jokey ads and entertaining connections reveal the strength of the insights that inspired the creative ideas and invited consumers in to participate, which in turn should drive real business growth.

HT to Pepsi for its bold, brave move. There's an element of a 2010 marketing trend we'll see mature in 2011: local is the new mass market.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Mark,

Great comments!

I certainly would NOT assert that having a popular ad is bad, I just hate the attitude (which is as common among marketing professionals as it is among the average consumer) that ads as entertainment are the goal. An entertaining ad that effectively conveys a message and alters attitudes is a huge win; an entertaining ad that makes people laugh and share the ad on YouTube but creates no change in behavior or attitude is a waste of media budget.

A few years back, one of my clients had a "hit ad" on their hands. It was enormously popular (and also a bit controversial) and drove terrific traffic (as well as a significant level of complaints.) It was successful in every way--except selling the product.

I agree with your thoughtful comments and appreciate the dialog. Thanks!

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Great post on social media measurements... somewhat reminds me of the old pre-bubble measurement of "web hits" as a measure of success that turned out to have limited value at best.

I wouldn't entirely dismiss the importance of popular ads for some categories, though... as a few years back, I did a blog / discussion board analysis of commentary for a major beer company - and found that there was a noted tendency for reactions to an ad to drive the tone of commentary... When a discussion thread started off badmouthing one or the other company's ad (generally Bud, Miller, Coors... that set of beers), then the comments quickly turned to malign the product as well; "Yeah, and their beer tastes like...(you can imagine)..."

Turns out, from discussions with the marketing people at the client that they had noted that trend - and since in some classic rivalries (I would put Coke-Pepsi very much in the camp of Bud-Miller) the difference in impressions is more significant than the difference in product attributes - so the negative view on ads driving the maligning of the product can result in adverse shifts in market share.

It is interesting that Pepsi is taking itself out of the high volume activity by skipping the largest single ad-showcase there is - the Super Bowl... I'll be interested to follow this past February...

Best,
Barry Horwitz

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Barry,

Thanks for the comments. It's funny you mention beer advertising, since the unnamed client in my prior comment (the one that had a hugely popular ad that did nothing to alter consumer preference or purchase behavior) was a beer client!

I still don't see likability as a goal in advertising. It's a strategy--like shocking consumers, touching them emotionally, or being informative.

You raise another interesting challenge--categories where consumers perceive little difference between competitive product attributes. I think that will get to be an even bigger issue in the future as advertising reach to consumers decreases and consumers' exposures to brands via social media increases. Being undifferentiated in a meaningful way in an era where most brand info is learned from other consumers and not via marketing communications will be a very dangerous spot for a brand.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Excellent post, thanks for shaing your insights on potential marketing ramifications. I agree with each point but the one about Social Meida, and how it's changing everything is so true. Every successful brand is going to have to take so social media in order to appeal to their customers and for customers to feel involved.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

I found this statement entertaining:
"They may count retweets, but what are the chances the $20M investment will be evaluated based upon 140-character pass-alongs?"

If it were up to me, I would hope that impact would be evaluated precisely in this way. Give project beneficiaries the tools to micro-report (twitter) to all those who voted for the project and let feedback loops go to work. This is what is missing from "official development assistance" - the assistance from below.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Marc, thanks fo the comments. My point in making that statement is that pass-alongs are actually worth nothing if the overall program fails to move the needle with respect to consumer perception of the brand. If they find the $20M program results in no change in consumer perception and no increase in purchase intent but there were 1M pass-alongs on Twitter (or 10M or 100M), then this program will not be considered a success.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Augie, One thing you outline here that is key: Pepsi has a plan. They are looking beyond the SM numbers, and at how their SM campaign relates to advertising, to sales, to PR, to causes and to the community, to the brand and its value.

Many brands jump into SM, get big numbers of fans and followers, PR coverage...then don't know how to use it or what to next. What's next is what makes the difference. It will be interesting to see what return Pepsi gets on its investment, if their plan works.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Davina,

So true! Forrester's been preaching about POST (People, Objectives, Strategy, Tactics/Tools/Tech--IN THAT ORDER) for some time. Marketers have to start with People and Objectives, but some seem to jump right into the Strategies and Tech.

I hope this program works for Pepsi. Both professionally as a Social Media consultant and personally as a fan of community programs, this could be a very nice win-win for Pepsi and consumers!

re: Social Media is the New Super Bowl: Pepsi Refresh and What

You're off to a blazing start with your Forrester posts Augie ;)

This move by Pepsi will influence everything across the board for all brands. Moves like these, will put more emphasis on the quality of connections and not just on number of fans a brand gets on their Facebook page. It's a smart and bold move by Pepsi. It goes to show that Pepsi is really taking the "POST" model to heart. I wonder what their Social Technographics Profile looks like and if they factored that in, too.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Thanks Chris. Really good question about the Social Technographics and Pepsi. I have no inside information, but my guess is they'll want to go broad on this and thus craft a multi-prong communication plan that considers different sorts of consumers. We'll all be watching Pepsi Refresh get executed!

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Very thought-provoking post Augie. I agree with Chris - you're off to a great start on this blog!

It's very exciting to see a major brand take this step and it will be an interesting case study to watch as 2010 gets underway. I think your point at the end about cause marketing moving into a new phase where customers' values and ideas are part of the process is the key to success. In the end, this is a great example of a brand developing a closer bond with its customers instead of broadcasting about how wonderful they are from on high.

I would like to see more of these types of programs developed and promoted using a mix of traditional media and online/social media. That approach might be an easier sell for brands that aren't willing to give up their traditional advertising yet.

Thanks for the post, and for the mention of my blog! I look forward to watching this unfold and continuing this conversation in 2010.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Thanks Brandon. It will be interesting to see the results of the Pepsi Refresh program. Keep up the good work on your own blog!

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Augie, Thanks for this great post. I will be forwarding it to many. But I don't think one has to include a cause in a social media strategy to be game changing. The success that P&G had with www.beingirls.com shows the impact just engaging the right customers with emotionally relevant and helpful information can have.
Looking forward to following this story and your blog in 2010.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Ann, thanks for the comment. I didn't intend to imply that the cause marketing itself was game changing but that Social Media allows cause marketing (and other strategies and tactics) to become game changing. I definitely agree with your point!

BTW, be careful with that URL! Adding the "S" and dropping one of the Gs is the URL for a spam site. The correct URL for the smart P&G program is beinggirl.com.

Lisa Bradner did a case study of this program a couple years ago. You'll find her Forrester report here: http://is.gd/5KMfv (Subscription required)

re: Social Media is the New Super Bowl: Pepsi Refresh and What

While I certainly find it interesting that Pepsi is making the strategic (cough... financial) move to back away from the Superbowl ads and invest elsewhere, I'm more interested to see this strategy unveil itself over the next 10 months. It makes sense to invest in and include social as a big part of your strategy, but right now, I don't think the social media aspect of the campaign is making many waves. Is it? I'd say the noise and push has been much more PR related with a lot of articles and activity popping up in the industry news. I haven't really seen much activity across the social channels and I think, right now, the average consumer may be unaware of the campaign... submitting the ideas, voting, etc. I know it's early and perhaps as the campaign grows from it's infancy, we'll hear more about it as consumers, but right now the only activity I see anywhere... online, offline, social networks and so on... has been through news and blog articles targeted at industry folks like ourselves talking about the strategic move, the dollars behind it, and now the broken website.

I know it's going to take a while for this strategy to prove itself, but I'm just curious to know if the PR blast is equaling anything more than a blip with their target consumers.

re: Social Media is the New Super Bowl: Pepsi Refresh and What

Augie, Thanks for the correction for www.Beinggirl.com. (I had dropped the second g and got there anyway. The added s just creeped in to my comment).

Great post and glad to see you're continuing the thoughtful and deep analysis in this new blog. I wonder if we will see copy cat cause marketing efforts emerge. Would they be considered just that? Has Pepsi claimed all the high ground or is there room for more brands in this altruistic space? It's still promotion and, while I applaud this innovative effort, I agree with James that it's not a sure thing how/if it will really play out as a game changer and how broadly it appeals to different customer segments.