Consumer Nation

Pepsi's Gamble: Sitting on Sidelines at the Super Bowl

In a daring move, PepsiCo is planning to sit on the sidelines during Super Bowl XLIV, ending a 23-year streak of advertising during the big game.

Pepsi Superbowl commercial

The National Football League championship has long been a key part of Pepsi's advertising strategy, with the beverage company using the event as a way to roll out some of its most memorable advertising, including spots with celebrities such as Britney Spears and Cindy Crawford.

Pepsi spokeswoman Nicole Bradley said the company is planning to shift its marketing strategy to be less about a singular event. Instead, advertising for the Pepsi brand will focus on cause-related marketing, with a campaign to kick off the "Pepsi Refresh Project." 

The project, which will be launched in January, allows people to compete for $20 million in grant money that will be doled out over the course of 2010. Consumers can propose projects in a variety of categories. The money will be awarded by Pepsi based on the results of online voting.

The "Refresh" project also will be closely tied with "If I Can Dream," a new reality show produced by Simon Fuller's 19 Entertainment. That show will track five young people who are hoping to be discovered in Hollywood.

Since the Super Bowl has long been seen as a premiere advertising event, with many consumers tuning in solely to watch the clever ads rather than the game, Pepsi's decision will be no doubt seen as another blow for more traditional forms of advertising. The choice highlights some of the shortcomings of a 30-second television commercial at a time when marketers are looking for ways to involve consumers more intimately with their brands. Those messages tend to become more complex.

To that point, Bradley said Pepsi is hoping to achieve "deeper consumer engagement" with the Refresh project. She added, the company would return to Super Bowl if it "fits with the brand's communication."

She noted that Pepsi's Frito-Lay will advertise during the game and Pepsi will continue to have a visible presence at the week-long events leading up to the Super Bowl in conjunction with its partnership with the NFL.

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Still, Pepsi and other advertisers are facing increasing challenges reaching out to younger consumers, who traditionally have been the key target audience of soft drink companies.

Pepsi is planning to increase its online advertising spending by 60 percent next year compared to this year, Bradley said. (She declined to discuss the total cost of the "Refresh" campaign.)

This plan reflects not only the large online components of the "Refresh" campaign, but also is a reflection of perhaps the best way to reach a younger audience, and to communicate the more complicated message of the "Refresh" campaign.

A lot is at stake. Pepsi's volume has been declining at a faster pace than the rest the industry.  In the first nine months of 2009, Pepsi volume fell 7.3 percent, steeper than the 2.3 percent drop in the overall soft-drink industry, according to trade publication Beverage Digest.  By comparison, Coca-Cola's namesake brand was down 6.6 percent over the same period.

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