Pepsi's 3rd Place Position – Social Media Was NOT the Problem - Julie Roehm

Welcome Julie Roehm, our newest MediaBizBlogger

The past week must have been a slow one on the marketing and advertising drama front because the stories that are getting top billing in many publications are all about Pepsi and the death of social media. Leave it to marketers to get you to read an article that predicts doom and gloom for the platform that was considered the newest darling of the industry.

What is particularly interesting about all of this, at least to me, is that people love to be dramatic and go to the RIP type of comments based on only a small set of cases. The cases that have been front and center are those of the Pepsi Refresh campaign and also the Burger King campaign, though the latter to a lesser degree.

In January of 2010, The New York Times had an article that outlined the purpose and intent behind the Refresh campaign. They wrote, "the project is meant to tap into a booming trend for what is called cause-related marketing or pro-social marketing, by which corporations seek to back up their talk about benefiting society." They quoted Lee Clow, the Chief Creative Officer and Global Director for Media Arts at TBWA Worldwide in LA who said, "Our idea was that this year we'd try to shift the marketing and communications to something that's truly walking the walk." The goal is "to develop a mechanism for young people to create ideas to make things better," he added, that "will ultimately become part of the global behavior of the brand."

And to be fair, connecting corporate responsibility in an authentic way is highly impactful and does change the way people feel about a brand. Take for example Microsoft. While Bill Gates is no longer running the company, they still get a large, positive bump in terms of perception associated with its founder's enormous charitable efforts.

But done at the expense of all other messages is something no company can afford to do. Nike doesn't do it, P&G doesn't do it, and neither should Pepsi. Rance Crain of Ad Age stated "there's also the danger that consumers could conceivably tire of causes or decide that Pepsi, a marketer long known for its ability to amuse and entertain, is taking itself too seriously. After all, we're talking about fizzy soda water here."

He went on to compare Pepsi's Refresh campaign with the brand that has usurped its number two position, Coke. In fact, the "Open Happiness" campaign has been a well-received multi-faceted, multi-media depiction of the brand that links to all generations in all the media that are most influenced by such messages. And because of it paired with the fact that Pepsi abandoned this space, they have made share gains.

Pepsi would argue that they have, in fact, been multi-media in their approach to the Refresh campaign. In a statement, the company said, "The Pepsi Refresh Project was launched as a 360-degree marketing campaign, including: targeted influencer outreach, celebrity involvement, sports sponsorship activation, employee, bottler and customer engagement, substantial public relations activities and -- as widely reported -- a significant mass multimedia investment to coincide with the program launch on Feb. 1. The Pepsi Refresh Project far surpassed consumer engagement and awareness expectations and industry benchmarks within the first several months of the campaign."

Taking all of this in stride leads me to just a few conclusions.

1. Pepsi was once "The Choice of a New Generation" but they seem to have stopped working hard to continue to connect to that original "New Generation" who are now quite a bit older. Abandoning those that put you where you are is never a good idea, especially when you are a mass producer and seller whose profits are made on volume as much as margin.

2. In its quest to be relevant and fresh, they narrowed their focus to media that is also narrowly focused. Perhaps a good idea for promoting their more progressive positioning but when done alone leaves others hanging.

3. They relied too heavily on the idea that those that had always drank Pepsi, and due to the high loyalty of long time Pepsi or Coke drinkers to their soda, assumed that they would stay even if they were not in front of them in the traditional media properties. What they seemed to have misjudged was that the generations who are not yet loyal to one soda were not influenced enough by the Refresh campaign.

4. And that brings me to the next major point, more important than the rest, which is that the message had nearly nothing to do with the product or the sale of that product. It was altruistic and admirable but it did not engage people with the drink itself nor the stores they are sold - only the endeavors that the campaign supported.

5. Pepsi at the end of the day is a mass brand and that means appealing to the masses on the product first and using the corporate responsibility to augment this and to entice others that are less influenced by the general message, second.

In the shortest terms, the Refresh effort seemed geared to drive people to something other than the product itself – it drove people to like the campaign, not the product. It drove them to websites, not the stores to buy it. You cannot walk away from that which generates profits. They are a publicly traded company and without profitability, their ability to support other causes goes away. The campaign was great but should have been done in tandem with a larger message about the product in the vein that made them successful in the first place, the products taste coupled with it's progressive, youthful energy, entertainment or both. That means a mix of traditional media with less traditional media that would embrace a new generation without abandoning the original one. Social media can and will drive success and did for the Refresh campaign. That was not the problem. There is no doubt that the Refresh campaign DID help to move the needle for the philanthropic elements of the effort, just not the one that counts..sales.

Julie Roehm is currently consulting for a host of companies in the area of marketing strategy and execution. The companies include large media companies, ad agencies, interactive television technology companies, financial services, private equity, media companies, automotive, new media start-ups and others. She frequently is engaged to speak at industry and corporate events globally and is a periodic guest contributor on Fox Business News, blogs for iMedia and is the official marketing auto blogger for AOL. Julie can be reached at roehm.julie@gmail.com.

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