Pepsi pulls out of Super Bowl: refresh of strategy

Pepsi is going to pull out of the upcoming Super Bowl event, in Feb’10. Traditionally, the advertising on the event has been a talking point in itself – the general public and the marketing community keep a close watch on the ads. The ads made specially for the Super Bowl usually have a bizarre quality about them – the logic being that since it is a one-time airing the spot must be clutter-breaking, fun, entertaining and get talked about. Two kinds of brands have benefited from Super Bowl advertising – brands that don’t have a consistent annual presence and work on relatively smaller budgets. They use the event as the one opportunity to get into the public eye – EDS, E*Trade and Monster.com come to mind. The other kind is the big brand that is staving off stiff competition to stay a step ahead of competition in terms of the cool quotient. The beer brands and colas perhaps fit in here. (Fedex doesn’t fit in either but they’ve had a fantastic track record of Super Bowl ads!).

So Pepsi’s decision to pull out of the big event after 23 years of presence is quite a big deal. The spots – about $3 million for 30 seconds, on average – don’t come cheap. Pepsi spent $33mn in the last year’s event. This year, Pepsi plans to invest in a cause-related marketing programme, ‘Refresh Everything‘.

‘The Pepsi Refresh Project’ starting next month…will pay at least $20 million for projects people create to “refresh” communities.

A Web site will go live Jan. 13 where people can list their projects, which could range from helping to feed people to teaching children to read. People can vote starting Feb. 1 to determine which projects receive money.

Pepsi estimates the effort will fund thousands of projects and says other businesses will pledge money, too.

The company plans to have events related to its new effort at the Super Bowl.

What could be the reasons & implications? Herewith some unsolicited thoughts:

– Carbonated soft drinks have stopped being the badge they once were, especially for the teens.  Brands that have a do-good property appeal to them; they see soft drinks as shallow. It seems to have reflected in the dropping volumes of soft drink brands in the US

– the online, cause related marketing is an attempt to reconnect with the youth and get the brand to be relevant; it is also an indication of the overall health/do-good push of Pepsico across their product portfolio

– Super Bowl ads traditionally were not meant to increase sales, but only create a buzz. Are big advertisers questioning the effectiveness of such strategies? Is it likely to go beyond the recessionary times?

– the shunning of a big ticket sporting event on TV by one of the big boys in the US, is in sharp contrast with the mega bucks that is likely to be put behind the upcoming Indian Premier League in India. In India TV still rules, eh?