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Mila D'Antonio | January 6, 2010

Pepsi Watches Super Bowl From the Sidelines

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As it becomes clear that social networks provide a real opportunity for performance advertisers, I'm nevertheless surprised about PepsiCo's announcement in December to sit out Super Bowl XLIV and not purchase an advertising spot, instead investing $20 million in a social marketing campaign.

Pepsi plans to launch a cause-related social media campaign in coming weeks called "Pepsi Refresh Project." Under the program, Pepsi will award grant money for community projects proposed by consumers. The $20 million is earmarked for the grants. According to the Wall Street Journal, Pepsi declined to disclose the new campaign's total cost but says it will spend 60 percent more on online ads in 2010 than last year.

When I heard the announcement that the biggest Super Bowl advertiser will withdraw from the most-watched broadcast of the year (last year's Steelers/Cardinals matchup drew 98.7 million viewers) I thought it sounded risky. Social media is, in many ways, the opposite of advertising. Advertising is about driving people to a purchase; social media is about building relationships and caring for them after the fact.

Therefore the two entities must work together, and to be successful, a marketing program must be integrated. Why wouldn't Pepsi leverage the Super Bowl to announce the social media campaign and drive viewers to the site? And let's not forget about the viral nature in recent years of people forwarding YouTube clips of Super Bowl commercials to their networks. This factor also could have led to greater participation in Pepsi's social campaign.

Surprised by Pepsi's decision, I spoke yesterday to Augie Ray, senior analyst of social computing at Forrester, to get some answers. He dissects some potential ramifications of this decision in his blog this week.

Turns out he agrees, saying "A social media campaign is something that should not happen in isolation...there was a part of me that was a little surprised that they didn't think about layering a social media program on top of a Super Bowl ad. There is a risk of course--it is the most-watched event of the year."

Ray says it comes down to this question for Pepsi: "Can we produce an ad with five or six spots during the Super Bowl, or can we make a difference and engage with people on an emotional level?" "When you stack those things on top of each other, Pepsi thinks there's more risk than meets the eye," Ray said.

Clearly Pepsi is not alone. Companies have shifted their marketing budgets to include social media, so Ray expects to see fairly large increases in social media marketing this year. But the larger trend, he said, will be to "find ways to make all your media work together."

So while Pepsi's decision may be a bit of a gamble, the social program could potentially be a big opportunity...if executed correctly. I'm sure marketers will be watching closely to see how this plays out.

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