The New Pepsi Challenge: Social Media Strategies Versus Superbowl Advertising

Back at the end of last year, Pepsi decided that they would use the $20 million they had originally budgeted for Superbowl advertising and invest that money in the social media space instead. Advertising during the Superbowl is the major opportunity of the year to get one’s brand in front of at least 100 million viewers at a cost of $3 million dollars for a 30 second slot. For the major companies that can afford the rates, it is the ultimate chest-thumping alpha-male king-of-the-jungle announcement to the world that we are big because we are here and we are here because we are big.

This is not without foundation. Few would argue that Apple’s 1984 advert for the Macintosh had anything less than a profound affect on the sales of the computer. It also helped that the ad was a world-class piece of production as well. Interestingly it was Steve Jobs and not Ridley Scott (as I had long assumed) that came up with the concept.

For a company like Pepsi to make the leap into the social media field was a major break with tradition, but also with the way things had worked up until then. Unfortunately, I was unable to interview anyone from Pepsi to ascertain what their thinking was about the worth of conventional advertising against the relatively untried and unexplored social media space. So I have no insight into the decision-making process to offer. But the fact they put their entire $20 million dollar budget and moved it from the safe and known into the uncertain and unsure shows a commitment to the new that we rarely see with large-scale corporations.

The strategy that they settled on was to build up on the already running Pepsi Refresh Everything project and infuse it with social media capability. HUGE were tasked with this and you can read more details of how they went about it here. Essentially, the most powerful force in the social media world – engagement – was harnessed by having participants nominate and vote for that $20 million dollar spend to good causes which come from the community that surrounds the brand.

The results for Pepsi can only be seen as an unqualified success. In the first month, the site had 2.5 million visitors. In the following months, each of the 1,000 monthly slots allotted for projects had filled within minutes: an indication of keen engagement. Also, their number of Facebook fans grew by half a million.

One of the great mysteries of investing in social media is how to measure return on investment (ROI). In the social media world, there is no single metric that can safely account for a given action producing a given result. One has to assume that all results are corollary in nature and are intrinsically subjective. What you have to do is weigh the results with common sense, experience and a pinch of salt.

However, by measuring engagement and monitoring what is being said about a given brand, product or person, we can certainly come to have a good idea about the state of the reputation of a given enterprise. And through this assessment of how the brand, person or product is being perceived, we can attach some idea of value.

Pepsi’s massive leap from lying 16th in the Forbes table of America’s most reputable companies in 2009 to 5th this year can in a very large degree be attributed to their move to a more committed social media strategy.

On that level, Pepsi’s bold decision to break into pastures new seems to have paid off very well and will surely give other blue chip companies pause for thought. But social media is more than a buzzword and it is not a technology. It is a world, like the everyday world, made up of human beings all with their own preferences, agendas and opinions. Once you start objectifying the space in the sense that it is a thing to be managed and manipulated (like objects in real life), you can run into trouble.

Pepsi also tried to rent a page at ScienceBlogs to provide nutritional information. Carl Zimmer describes the debacle very nicely in this post at Discover Magazine. Bloggers abandoned ScienceBlogs because many believed in some way that credibility cannot be purchased or even granted by association. To have independent analysis alongside sponsored analysis – no matter how open and transparent the sponsor’s position – was always going to be a problem.

A philosophical view from the Pepsi position could be that you win some, you lose some. But the lessons to be learned are important. It is possible to benefit from being present in the social media space. While it may seem and feel nebulous and amorphous, contained within are distinct spaces in which people have their own methods of engaging with each other. The fund-raising, community-involving space of the Refresh Everything project is not the same space as the pedagogical and data-centered space of ScienceBlogs.

With Pepsi having led the way, we can expect to see more of the bigger companies taking up larger and larger positions in the social media space. Looks like there is going to be some interesting times ahead.

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