How Pepsi lost it's Fizz

This is part 2 of a series from the AdContrarian blog this week.

I am a huge pro-social media guy.

But I'm also a Big Picture/Little Details guy too.

It is stupid to stop what is working with your advertising and marketing just to jump on board the Next Big Thing.

My advice is to ADD Social Media to what you are already doing, don't swap one for the other.

Pepsi is now number 3 in soft drink sales, behind Coke and now also behind Diet Coke.

Normally it would take something like the Tylenol scare of 1982 to lose share like that.

Here's part 2 from their blog:

The Pepsi Follies

"Pepsi BashFest 3000" continues here today at Ad Contrarian world headquarters.

For over three years we have been documenting the marketing follies at PepsiCo.

On July 29, 2009, we said...

"It seems like the brand babblers have taken over at Pepsi, and they are screwing it up royally....It will take a while (like it does in all big organizations) for someone with a brain to realize what's been going on. "

Pepsi has been the world's leader in advocating and implementing new-age marketing nonsense, and is now paying the price for its foolish belief in the three-headed marketing monsters: "branding," "engagement," and "conversation." (Here's a tip for anyone left alive in the Pespi marketing department. There is one thing, and one thing only, that advertising is about -- persuasion. All the rest is word games and chit chat. Got it?) Last week it was reported that after years of fighting Coke for first place in the soft drink category, Pepsi-Cola had fallen to third place. The L.A. Tiimes called it...

"...a stunning fall from grace."

According the The Wall Street Journal...

Pepsi-Cola and Diet Pepsi saw their U.S. sales volumes in 2010 fall sharply, by 4.8% and 5.2%, respectively...

The U.S. soft drink market is about 74 billion dollars. If my math is correct, a 5% drop in Pepsi's US market share (which is about 10%) cost them well over $350 million on the Pepsi-Cola brand alone. While Coke has been wisely sponsoring American Idol for years (yeah, on that useless old dinosaur, the television) Pepsi has been suffering from the marketing version of Attention Deficit Disorder exemplified by chasing dubious social media rainbows and comical "re-branding" exercises. In (the 10am re-post) about the Pepsi Refresh Project (called Social Media's Massive Failure) I included this quote:

"We took the divergent path," explained Frank Cooper, chief consumer engagement officer for Pepsi. "We wanted to explore how a brand could be integrated into the digital space."

The alarming aspect of the above quote is not the vapidity of the cliches, it's the fact that Pepsi has someone called a "chief consumer engagement officer." You have to be seriously confused to pay someone to run around your building with a title like that. The most unsettling part of this episode is that Pepsi has been fawned over as "forward thinking" among the brand babblers and social media hustlers who have seized control of the marketing world. When Pepsi launched its Pepsi Refresh social media project last year, Time magazine had this to say:

To Pepsi, and to companies around the world, the days when mass-market media is the sole vehicle to reach an audience are officially over.

These days, viral marketing seems like a smart strategy. "This is exactly where Pepsi needs to be," says Sophie Ann Terrisse, founder and CEO of STC Associates, a brand-consulting firm. "These days, brands need to become a movement..."

To set an example of maturity and restraint, I am not going to make any "movement" jokes. Here are some excerpts from three years of posts about PepsiCo's marketing follies from the deep recesses of The Ad Contrarian archives: March 18, 2008

Pepsi Drinking The Kool-Aid

Pepsi is going all unconventional and artsy on us.

They're introducing a new beverage called Tava with websites, music downloads, "brand experiences"... In other words, the the full pantheon of over-priced, under-performing ..."non-traditional" marketing gimmicks.

They'll be giving free samples to employees of Apple, Google and MTV. Dude, how cool is that? But wait, there's more. They'll also be giving it away at the -- are you ready -- Sundance Film Festival! Oh my God! Mega-double-extra-wicked cool!

Pepsi's agencies are making marketing mistake number one. They're marketing to themselves.

October 24, 2008

Friday Filler

Pepsi is spending 1.2 billion (yeah, with a b) behind a "rebranding" over 3 years. The first move is the introduction of new logos. If the rest of the "rebranding" is as shitty as this, it's gonna be a long 3 years.

March 2, 2009

The Two Elements Of Advertising

The advertising business...is composed of only two elements: ads and bullshit.

If you would like a nice, close-up look at bullshit, I recommend this video. It is part of a presentation made a few weeks ago about the "new" package for Tropicana orange juice (a PepsiCo product) by its designer, Peter Arnell.

The new package was yanked after about a half hour because it was such a piece of crap and provoked a firestorm of criticism and customer unhappiness.

Going back a few weeks, before the firestorm, and looking at the pretentious bullshit that was being served up is very entertaining and satisfying.

Whenever some designer starts out with, "We started on a journey..." as if he was climbing the fucking Himalayas instead of playing with crayons, you know there's some massive bullshit heading your way...

March 11, 2009

What About The Research?

Last week I wrote about the Tropicana package massacre.

The question I would love to have the answer to is this: What about the research?

I've been around Pepsi people (the owners of Tropicana) and their kind, and I can assure you they don't wipe themselves without first researching which hand consumers prefer.

Somewhere, I guarantee you, there is a very big deck that demonstrates conclusively that the (failed) Tropicana package was a dream come true...

...I'd love to see that Tropicana research deck. I'll bet it's a classic.

July 29, 2009

Championship Brand Tinkering

There are many flavors of baloney floating around the ad world these days. There's "digital" baloney, there's "conversation" and "engagement" baloney, but the biggest, most pervasive, and most dangerous form of baloney is still "branding" baloney...

...It looks to me like Pepsi-Cola Co. are becoming the all-time champion brand tinkerers.

August 03, 2009

Meet The New Boss, Same As The Old Boss

One of the very charming aspects of Web Maniac Disease (WMD) is the callow belief in the virtue of all things digital. For...a good laugh... read the article about the BlogHer convention in Chicago from last week's Ad Age... My favorite quote from the piece:

Asked how PepsiCo, which appeared to be the biggest sponsor of BlogHer activities, would be measuring its success, Global Chief Marketing Officer Jill Beraud, said: "We believe it's the way of communicating in the future, so this is not a short-term ROI ... this is really an investment in our brands and understanding our consumers."

Oh. It's about branding! Well, you Pepsi guys ought to know.

December 07, 2009

The 2009 Bully Award Winner Is...

The 2009 Bully Award for Outstanding Achievement in Advertising and Marketing Bullshit -- the Turd d'Or -- goes to the "Breathtaking" Pepsi design document.

Several months ago, when this document became public, I got a nice chuckle out of it...

Recently, in reviewing the nominees for the Bully Awards, I had the opportunity to take a closer look at it.

With the perspective that a few months affords, I have a new appreciation for the document. Not as an article of business communication, but as an artifact of an industry so totally engulfed in madness that this piece of lunacy may very well live on as the marketing icon of our era.

June 15, 2010

Pepsi Proves You Can Give Away Money

I know I'm like totally old school and out of it and a big old dinosaur, but I thought marketing was supposed to be about selling stuff. Silly me.

So wasn't I all red-in-the-face and feeling like a dork when I read an interview in BrandWeek with Pepsi's marketing director. The interview was about their much ballyhooed "Refresh Project" -- which, in my churlish opinion is a big cynical gimmick to get some marketing leverage by giving away 20 million dollars to people with nice ideas.

Now, before you go calling me an ogre, I am all in favor of giving money to help people and communities. I even do a fair bit of it myself.

The difference between Pepsi and me, however, is that I don't go around beating my chest about it. I do it because I think it's the right thing to do.

...Call me cynical, but to me altruism loses its luster when it seeks bouquets.

Pepsi is brazenly using their "Refresh" project for the purpose of buying their way into social media stardom and "creating buzz on social networks." Double yuk...

The thing that interested me most about the interview was that it focused on the marketing effectiveness of the campaign without once mentioning the word "sales."

"The success has been overwhelming. We have more than doubled our Facebook fans since we started the campaign. We have more than 24,000 Twitter fans"

Now here's the thing. If you're going to give away 20 million dollars to help people and communities, then god bless you...

On the other hand, if you're doing it to promote sales, then don't pretend you're Mother Teresa.

And if you're just doing it to attract Facebook friends and Twitter followers, then you're seriously demented.


This is probably the most expensive social media effort ever. I'm very curious to know what effect it will have on sales. So far all it's proven to me is that if you want to give away money, you can.

Yeah, the success was "overwhelming." I wonder what universe she is living in? I wonder how many Facebook fans it takes to cover a loss of 350 million dollars? It was just a few months ago that the Pepsi marketing team was taking self-congratulatory victory laps at digital marketing whack-a-thons. Having once worked on the Pepsi business, I would like to give these people a little advice: Stay as far away as you possibly can from the next bottlers' convention.

Photo from: http://www.public-domain-photos.com/authors/Jon-Sullivan

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