Pepsi’s Bet on Community Projects Over the Super Bowl – The New York Times,
Pepsi Bets on Local Grants, Not the Super Bowl
What’s better than reaching more than 100 million viewers during last year’s Super Bowl? For Pepsi, it could be 6,000 football fans during a high school game on Friday night in central Texas. Or a group of parents who wanted a new playground in their Las Vegas neighborhood.
That is the bet that PepsiCo made when it walked away from spending $20 million on television spots for Pepsi during last year’s Super Bowl and plowed the money into a monthly online contest for people to submit their ideas and compete for votes to win grants.
Withdrawing from the Super Bowl for the first time in 23 years and giving the money away for the Pepsi Refresh Project was considered a gamble by the beverage maker as it explored the potential of social media and cause-related marketing to make a difference in its business. But the company, despite accusations that some winners used questionable voting tactics, says it was a huge success and plans to expand it beyond the United States this year.
More than $20 million in grants, ranging from $5,000 to $250,000, has been distributed to about 400 winners so far, including $25,000 for new uniforms for the Cedar Park High School band in Cedar Park, Tex., which took its campaign to win votes to Friday night football games. In Las Vegas, a new playground opened last week with a $25,000 grant won in September.
“This was not a corporate philanthropy effort,” said Shiv Singh, head of digital for PepsiCo Beverages America. “This was using brand dollars with the belief that when you use these brand dollars to have consumers share ideas to change the world, the consumers will win, the brand will win, and the community will win. That was a big bet. No one has done it on this scale before.”
As Pepsi had hoped, competitors have turned to their personal networks on Facebook and Twitter to gain support for their ideas, extending the Pepsi brand and its do-good message. Nearly 19 percent of the 77 million votes have been cast through Facebook. On Twitter, participants were urged to use the hash tag “#PepsiRefresh,” and they did.
B. Bonin Bough, who oversees social media for PepsiCo, said that the power of social platforms, like Twitter and Facebook, and blogs allowed this program to work and have reach. “But most important is the power of these platforms to help individuals build communities to help support their efforts and ideas,” he said. “These communities will exist long after and are a testament to the type of social impact programs like this can have.”
But did the Pepsi Refresh Project sell more cans of soda? Prompt more consumers to switch from Coca-Cola to Pepsi? Create more brand awareness? Build stronger relationships with consumers?
Figuring out how to translate social media efforts into sales and customers — and how to measure overall effectiveness — was cited as a top concern of many companies looking to expand their efforts to reach consumers using social media technologies in 2011, according to a recent survey by the Harvard Business Review Analytic Services.
More than 79 percent of the 2,100 companies participating in the survey said they either currently use social media channels like Facebook and Twitter, or are preparing to start social media initiatives. But most executives reported they were still struggling over how best to use the different channels and measure their effectiveness.
Of those companies participating in social media, nearly a third do not currently measure the effectiveness of their programs, and less than a quarter are using social media analytic tools, the report said.
At Pepsi, the company is using dozens of methods to assess the impact of Pepsi Refresh, but its success is not being measured by sales of the beverage. Last year, Pepsi sales fell 6 percent, a sharper decline than the 4.3 percent decline overall in carbonated sales beverages.
Mr. Singh said the Pepsi Refresh Project was not a sales-driving program, but viewed as an investment to build brand awareness and cultivate a long-term relationship with consumers. “It was designed to drive brand health,” he said. “We look at brand equity, brand health and sales — and we have seen movement in all of them.”
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He also said the project had allowed the company to understand and learn the priorities of many of its customers across the country. “There have been 120,000 ideas submitted,” he said. “It gives us a strong sense of what matters to them and what is exciting to them.”
Allison H. Fine, co-author of the book “The Networked Nonprofit,” said the upside of the growing number of companies’ embracing social media to run online charity contests was that a local shelter could compete head-to-head for money with a large national nonprofit and do well.
“But it is still different from traditional philanthropy,” she said, noting many of the awards are to support “loving acts of kindness” and not aimed at achieving social change or perhaps a community’s more urgent and important needs.
At Cedar Park High School, band members waged a four-month campaign to win the $25,000 grant from Pepsi Refresh for new uniforms last fall; their efforts included distributing fliers during a game and asking people to vote online in support of their request.
They also urged people to use their mobile phones to cast a vote during halftime. To help them text the number, band members created a formation on the field of 1-0-2-1-1-4 while an announcer told fans what to do.
“That was a lot of fun,” said Bob Chreste, associate director of the high school band and the driving force behind the band’s successful campaign. “A lot of people in the audience during the game pulled out their phones and voted.”
For Pepsi’s advertising agency, TBWA/Chiat/Day, based in Los Angeles, the decision to skip the Super Bowl ad last year and use the money for the Pepsi Refresh Project acknowledged the consumer shift toward social media and the need to reach the millennial generation with a project that allowed them to participate in a meaningful way.
“It was a big deal,” said Carisa Bianchi, president of TBWA/Chiat/Day, about the decision to forgo a traditional ad. “But it really placed Pepsi as a modern brand.”
What about this year’s Super Bowl? The Pepsi Max brand will join its sibling brand, Doritos, in the Crash the Super Bowl contest, which will offer six ad spots this year for consumer-created commercials. Voters decide which spots get on the air.
A version of this article appears in print on January 31, 2011, on Page B4 of the New York edition with the headline: Pepsi Bets on Local Grants, Not the Super Bowl. Order Reprints | Today’s Paper | Subscribe
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