Pepsi Refresh: failure of marketing or Social Media?

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Recently, in blogging circles, The Pepsi Refresh project was declared a failure. In case you’ve been living under a rock, the project is a 2010 initiative by PepsiCo to award $20 million in grants to individuals, businesses and non-profits that promote a new idea that has a positive impact on their community, state, or the nation.

The reason for the project to be declared a failure: Pepsi’s market share slid during the campaign period. Meanwhile the campaign was ‘successful’ in terms of social media metrics: Over 80 million votes were registered; almost 3.5 million “likes” on the Pepsi Facebook page; almost 60,000 Twitter followers. Apparently even the new CEO of Pepsi said something to the effect of ‘blowing up the place’ indicating that a change in approach viz. relaying on ‘old media’, is imminent. All this was enough for some to label this a failure of social media in general. There are as many ‘naysayers’ about social media as there are ‘experts’ in the field. Sometimes it is difficult to say which breed is more annoying.

I am not aware of the reasons-why for the loss of Pepsi’s market share (or Coke’s gain) – there could be so many factors involved. But from what I’ve read on the net, Pepsi stayed away from large mass media presence in the US and diverted almost all money into Social Media activities. They’ve stayed away from Super Bowl for some time now and the last time a Pepsi TV spot became a hit seems a while ago. Did they invest in social media activities at the cost of mass media advertising? As in did it replace in part or in full, the investment dollars in advertising? Maybe experts who’ve worked on the Pepsi account in the US can shed some light. But if the decision was to replace advertising investment instead of adding to it, then it seems like a mistake.

There are still some categories where good old ‘audio-visual impact’ is a must in creating brand likeability. Take beer for instance. Ads like the Heineken ‘Walk In Fridge‘, which go viral across the world, lead to a positive impact on the brand in a subliminal way. It adds a halo of likebality to the brand -which goes a long way in categories where parity is the norm. The classic Pepsi TV ads, had a similar effect on the brand, me thinks. While social media activities creates a level of interaction with the brand it should not come at the cost of involvement or engagement. So did Pepsi lose out on this angle in the US last year, which led to a slide in market share? And if it is not so, I think it is grossly unfair to blame social media for it. It is no reflection of the power of the medium – its just that it cannot replace another medium – television – as yet.

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  1. A week back Gaurav had written on the same subject and I shared my thoughts at

    here is my comment on this piece:

    Pepsi Refresh Project is something which personally excites me a lot. The whole idea of how a corporate can do more for the society with the help of its brand lovers. However, Gaurav please correct me if I am wrong. More stories which claim that because Pepsi did Refresh Project and not the Big Bowl or traditional ad spend which lead to its fall to #2 make it difficult for Brand Owners and CEOs to believe in ideas on the lines of Refresh Project.

    I only hope they read more into the fall to #2 without making attributions to just lower spends in traditional media channels.

    And let's not forget Coke has decided to cut it's budgets by 6% and spend more on Social Media. Which will be a interesting to wait and watch.

  2. that racist stereotypical pepsi commercial during the superbowl 2011 sure didn't help either. hey, smart move marketing team *thumbs up!*

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