Pepsi Refresh Project — Beyond the Hype

Pepsi Refresh Project — Beyond the Hype


What should be the criteria to evaluate a digital marketing promotional campaign?

Before you think of spending the money on any activities, it is advisable to give it a deep thought and analyze the key reasons why you are spending this amount and if you spend the amount, will you be able to achieve the objective for which you have spend the amount. The key to this is engineering the design of the action in such a way that we can determine how should we go about the executing the activity, so that we get a desirable result and yet be profitable at the same time. Consumers and business entities have been much more demanding and wanting to know how the money is spend, and are still searching for clear-cut answers.

Some of common concerns / questions for evaluating any marketing promotional campaigns are as follows:

  1. Why do you want to invest in a promotional campaign? Is it for introducing a new product into the market, or to expand your products in its current location or newer geographical locations, or increase your market share, or to increase the profitability of the business? The reasons may vary from company to company depending on which stage the product is in its life cycle, and the characteristics of the market it is catering to.
  2. How will you go about implementing your campaign is the next question? Will you take the traditional route or will you co-opt the new digital/social platforms available to reach out to your audience?
  3. What is the message that you would communicate across to your audience? What sort of response are you expecting from them? Will you attract them through an emotional message or open the logic gates- will it be subtle or overt etc.? Are you contemplating to involve them to reinvent your company by opening doors for two-way communication? The key objective of your message should be to hook your audiences to speak about your product/brands and keep the continuity of conversation rolling. It should encourage and motivate your audiences to share the message of your brand and be an advocate within their extended network.
  4. The company should examine if the message is going out in as clear manner as prepared by the company or is the message getting distorted in the process of transmission across the value chain. Depending on this, we can envisage the result by verifying whether the campaign is bringing in more referrals or even generating more discussions around it.
  5. As an organization, are you able to integrate and weave in harmoniously all other marketing efforts through this campaign? Is the traffic increasing positively towards your brand?
  6. Are you able to track the progress of the marketing campaign? Are these efforts drawing you closer to your required objective like increase in sales, or increase in market share or increase in brand recognition or increase in referrals and so on?
  7. Can we monitor what is Return-on-Investment (ROI), in the process and after you spend all the entire budgeted amount? Is it worth it? Are you able to acquire new/enlarged customer base based on the goodwill and efforts of your current customer base who have been an advocate of your product/ brand?
  8. With increasing digital clutter coming one’s way and the consequent reduced span of short term memory among the customers, is your brand breaking through the perception filters of the mind? Can your product/brand get and retain the spotlight in the minds of customer?
  9. Are you working on the insights and feedback you are getting from your customers to fine-tune and tailor it into your campaign to continuously improve and refine it?

If you keep a close eye on the customers who criticize your products/brands, you will be able to get clues as to what these customers expectations are. These are the customers who take their valuable time out to give you key inputs to improve your products. Listen to them always, and give it a fair thought even when you may not be initially inclined to agree with them. Customer is the king, listen to them always. You never know if you read between the lines of what customers is saying then you may be able to build a new market for your product or a new product for the market. By properly evaluating the digital marketing campaign and its matrix at regular intervals, you will be able to make sure that the remaining money which you plan to spend for the campaign is going in the right direction.

Was the Pepsi Refresh Project successful? Why or why not?

Pepsi Refresh Project has had a mixed reaction as it harnessed a lot of attention for being innovative and yet it had to face strong criticism. Back in 2010, Pepsi made a bold decision which put the company in spotlight. Pepsi opted out of advertising in Super Bowl for the first time in 23 years. The company decided to spend $20 million on online charity competition called the Pepsi Refresh Project. As a company, Pepsi wanted to make a difference for its business, so it took the risk to explore the potential of social media and cause-related marketing. Pepsi through its Pepsi Refresh Project decided to give grants ranging from $5,000 to $250,000 each month to anyone who could submit their ideas that would help (refresh) the world. Each consumer could vote for any of the ideas that they believed in. These categories were: health, arts and culture, food and shelter, the planet and neighborhoods and education. Back then in 2010, the cost of ads to be put up in the Super Bowl could be as high as $2.8 million for a 30-second spot.¹ In contrast, the company allocated in the U.S., $1.3 million per month to the Pepsi Refresh Project.²

While the Pepsi Refresh Project was running, Pepsi had consistently lost its market share and volume; it dropped to third place behind Coke and Diet Coke.³ According to Beverage Digest, a trade publication and data service, U.S. sales of Pepsi-Cola and Diet Pepsi fell 4.8% and 5.2% in 2010.⁴ The brand is estimated to have cost the parent company more than $350m due to the dip in market share in this period.⁵ Coca-Cola and Diet Coke sales also slipped, just by, 0.5% and 1%, respectively.⁶ The ultimate goal of this campaign was build awareness which definitely was achieved. However, this did not translate into earnings enhancement.

Some of the positive results achieved through the Pepsi Refresh Project.

  1. Pepsi was the second-most discussed advertiser associated with the Super Bowl, despite of not advertising there for the particular period (Nielsen).⁷
  2. Because of the first mover advantage, it surpassed over 3 billion audience impressions in eight months creating a steady stream of media buzz.⁸
  3. From the social media perspective, the response for Pepsi Refresh Project was spectacular: 80 million votes registered; 60,000 followers on Twitter; 4 million “likes” on Facebook.⁹
  4. 37% of Americans were aware of the Refresh Project.¹⁰
  5. Over 18 million unique visitors visited from January-November 2010.¹¹
  6. Over 12,000 projects have received votes and 2 million online comments till date.¹²
  7. Pepsi announced that it give $1.3 million in grants for Gulf oil disaster-related projects as part of the Refresh Project.¹³
  8. Celebrities were pulled into to give further impetus to the campaign.
  9. By placing “power votes” on the bottom of their soda caps, Pepsi tried to incentivize the consumers to buy Pepsi.

The possible flaws in the project could be as follows:

  1. It became difficult to evaluate the genuineness as many nonprofit organization participated in the voting program, resulting in persistent allegations of fraud.
  2. The program had no direct tie up with sales of the brand, resulting in decline in sales of Pepsi.
  3. It was trying to cater to too many organizations across multiple issues/geographies without focus on any specific issue.

By January 2011, The New York Times published an investigation on the project. Allegations of cheating emerged and participants of the Pepsi Refresh Project accused that Pepsi for dodging their calls and emails. Pepsi denied these accusations but promised to investigate the same.

What should Pepsi do about this project?

Pepsi definitely garnered many eyeballs for its bold decision for stepping out of Super Bowl and investing the amount for a good cause through its digital campaign. But the saying ‘Don’t put all eggs in a one basket’ fits the Pepsi’s Refresh Project. The basic idea behind this campaign was to increasing awareness about the brand. The company assumed that if the audiences get involved with their brand then they are more likely to buy their product because of higher engagement level and higher recall value. The company forgot the fact that people drink Pepsi just to quench their thirst feeling. Past studies have proved that what people say they will do is quite different from what actually they do. Pepsi should have taken an integrated approach as every media has its pros and cons for reaching out to the audience. If you investigate the key reason why people choose social media, you will understand that primarily reason is to share photos and videos which they find interesting. You cannot expect two different media like print and the online platform to function in a similar manner. One has to also look into the fact that the given product is in which stage of the product life cycle. If the product is in its mature stage just like Pepsi was, going completely on digital platform may not be a relevant or best choice for this initiative.

For expanding any business, the key mission should be to reach out to larger audiences who though being a part of your target audience still don’t purchase your product. Why does a company advertise? It advertises because it wants to grab the attention of those audiences who are either not interested in their brand, or who have never bought their brand because of some preconceived notion. Advertisements and promotions also caters to those people who have bought your brand in the past but when they go for shopping, your brand does not pop up in their mind anymore because of lack of visibility. The role of advertising and promotions is to eliminate the saying ‘out of sight and out of mind’. Hence, the business should ensure that when customer writes down his/her shopping list, your brand should be mentioned in that list. If not, then ensure that your brand gets a good visibility while it sits on the shelves of the store. It doesn’t really take time for your competitor to pull your customers’ impulse buying behaviour towards them by good advertising and promotion. Past studies, in this product area, have shown that it does not take time for customers to change loyalty and opt for competitors brand if that brand is easily available or if that brand is cheaper on any given day.

Historically, the Pepsi as the brand had campaigns that were all tied to music and entertainment. Pepsi should focus on what it is known for. It is easier to build on nostalgic memories associated with the brand. Pepsi Refresh campaign fizzed out eventually. The new campaign ‘Live for Now’ was launched globally. Through this campaign, Pepsi was planning going back to its roots.