Pepsi Sidelines Super Bowl Ads, Opts for Social Media Push

by Pam Dyer

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Pepsi Sidelines Super Bowl Ads, Opts for Social Media Push

Are you like me? Do you enjoy NFL football? If so, we’ll both be watching the Super Bowl on February 7th.

The Super Bowl is consistently one of the most-watched television programs each year. Even in the face of a recession and eroding network television viewership, advertisers are willing to pay big bucks for a commercial on Super Bowl Sunday. But PepsiCo sent tremors through the TV industry last month when it announced that, for the first time in 23 years, it will not have any ads in the Super Bowl broadcast. Instead, the company will be spending $20 million on a social media campaign called The Pepsi Refresh Project.

Pepsi is historically a prodigious broadcast advertiser. Although brand spending has declined in recent years, the company has continued to devote tens of millions of dollars to TV. And since the Super Bowl has routinely garnered the largest audience of any TV show, Pepsi embraced it with gusto. The 2009 game between the Pittsburgh Steelers and Arizona Cardinals attracted a record 98.7 million viewers (42% of U.S. TV homes), many of whom watched the commercials as closely as the football game.

The Internet is changing the advertising market

Pepsi’s decision to abandon the Super Bowl, once regarded as a can’t-miss showcase for major brands, underscores how the Internet is transforming marketing by providing companies with cheaper ways to communicate their messages to consumers. As television viewership in general has diminished in recent years, Internet usage (especially social media engagement) has increased. In the highly sought after 18-34 demographic, 85% use some sort of social media (social networking, blogging, or texting). eMarketer forecasts that 2009 social ad spending will exceed $1.2 billion when all expenditures are tallied, and that it will become an even higher priority in 2010. Marketers have embraced social media because they can target consumers who have an affinity for their brand and engage them in meaningful ways. They can also monitor word-of-mouth brand-centric conversations, facilitating easier reputation management.

Pepsi’s decision to pull its advertising from the telecast and concentrate on social media strategy is seismic given the company’s long-time synergy with the Super Bowl. Pepsi has consistently bet the farm on the broadcast, spending $142 million on ads during the last decade. Its commercials are frequently the most memorable — in this spot from 2008, Justin Timberlake is drawn toward a woman and somehow pulled through space, leading to close and sometimes painful encounters with immovable objects:

(If you can’t see the video, you can watch it here.)

The Pepsi Refresh Project

Launching on January 13th, the Pepsi Refresh Project microsite will solicit suggestions from visitors about projects to refresh their communities and make the world a better place. Site visitors can begin voting on February 1st, and the projects that receive the most votes will be funded by Pepsi. The company expects to spend in excess of $20 million to fund thousands of projects. Pepsi hopes to start a movement in which other businesses and organizations will begin funding community projects in the same fashion. It is also looking to forge deeper connections with its audience via their participation.

The company has also created a Facebook Page to support their efforts:

pepsi-facebook

The page sports a link for visitors to find out more about the campaign, which takes them to the Pepsi microsite. If visitors go to to the site and watch the featured video, they’ve already had three interactions with the brand. If they decide to check out the blog, that makes four interactions. If they click on the Twitter logo and tweet about the campaign to their followers, visitors become brand advocates. You get the idea — Pepsi has quadrupled its visitors’ engagement and created brand champions at virtually no cost to them.

A risky proposition

This strategy is a gamble for Pepsi. Abandoning the Super Bowl telecast leaves it wide open for Coca-Cola, Dr Pepper Snapple, and other competitors. Carbonated soft drinks are struggling, and Pepsi is no exception given its declining revenues in recent years. But if its new social-media strategy gains traction, Pepsi will build brand awareness and increase sales while spending less than it has in the past. It will also have an advantage over its competitors in a new advertising realm. On the other hand, the company could spend $20 million on charitable causes (which is great in and of itself) without generating the buzz and the rewards they had hoped for.

So on Super Bowl Sunday this year, while you and I are watching the sports and advertising spectacle, Pepsi will be marshaling an army of texters, bloggers, and tweeters in an attempt to rewrite the rules of marketing.

What do you think of Pepsi’s decision to abandon its Super Bowl advertising for a social media campaign? Will this strategy enhance its brand awareness among consumers? Please leave a comment!


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