Commentary
The Cause That Refreshes: Project Boosts Pepsi Brand, Not Sales
- by Erik Sass , Staff Writer @eriksass1, January 31, 2011
One year in, the Pepsi Refresh Project encapsulates both the potential of social media and some of its paradoxes: specifically, is there any way to be sure, going into a social media campaign, that it will actually help sell your product?
By all accounts, Pepsi Refresh has been a big success in its stated goals of raising Pepsi's brand awareness and burnishing the brand's image, by giving away millions of dollars of grants to charitable initiatives large and small, with individuals and organizations submitting ideas online, and winners chosen by online voting. Altogether Pepsi allotted $20 million to fund grants in the project's first year, working out to about $1.3 million in grants per month.
Aside from some complaints about bigger organizations dominating the voting (which Pepsi has addressed with some tweaks to the submission categories and voting process) there's no question that Refresh has created a lot of mostly positive buzz around the Pepsi brand -- from social media mini-campaigns created by people submitting ideas, and media coverage of winners and their charitable projects, among others.
And the online metrics are indeed impressive: Pepsi tells the Wall Street Journal that the Pepsi Refresh Project has received more than 150,000 idea submissions in the last year and tallied 76 million votes from 17 million unique visitors over the same period. In addition to casting their votes, these visitors also left 1.6 million comments, suggesting a pretty high level of engagement with the site and the concept in general, while the Facebook page attracted more than three million "likes."
The only problem: the incontrovertible success of the Pepsi Refresh Project as a social media campaign doesn't seem to translate into actually, you know, selling more of the product -- at least in the short term. The total volume of Pepsi sales slipped 8.6% in the first nine months of 2010 compared to the same period in 2009, according to figures from trade pub Beverage Digest cited by WSJ.
True, this was partly due to economic conditions (and probably growing concern about obesity and health eating): archrival Coca-Cola saw total sales volume decline 6.6% in the same comparison. But it's hard to spin an 8.6% drop in sales as evidence of success for the brand's main marketing effort in 2010.
Of course, this touches on the ever-present issue of social media ROI. If you're inclined to be sympathetic to Pepsi (and supportive of bold social media experiments), you might argue that it's too soon to judge the actual, long-term effect of the Pepsi Refresh Project. Sure, its sales may have taken a hit from recessionary pressures, but the positive associations engendered by Refresh will linger in the collective imagination for years to come, buoying brand awareness and sales in the long run.
If you're a skeptic, on the other hand, you might argue that any marketing campaign which doesn't bear some kind of fruit -- quantifiable fruit, with dollar signs on it -- in a year or less is basically useless. True, brands do conceive and execute multi-year marketing campaigns, but I imagine almost always with the expectation that some benefits will be realized immediately (within the first year) in terms of sales lift -- thus justifying the continuing expenditures.
Erik Sass is editor of Publishers Daily. You can reach Erik at eriksass@gmail.com.
Pepsi Refresh? Who really cares? And don't throw all the numbers of people who responded in some way. People always respond and are thrilled when someone is giving away FREE money especially to their own pet projects.
Yes, it is important to a huge company's brand that the company be civic minded, but to actually influence people to BUY is not the same AT ALL as just plain brand awareness...they need to LIKE to drink it...so, make people like to drink it.
Me thinks a company sometimes gets more caught up in it's own idea if what is important to people than what IS really important to people (people being the ones who actually open their wallets and pay for your product) and not non profit organizers and the news media.
I (as a consumer) do not care one white about who Pepsi gives money to when I am buying my party supplies.
Pepsi would have created a better campaign for S-O-C-I-A-L media had they used social media to sponsor small community get-togethers around various smaller issues (none really controversial) and just gave everyone a bottle of Pepsi.
Pepsi tastes great (sorry Coke!) and since social media is about engaging with your audience (read -your money spending customers) engage with them in a way they will appreciate.
****Make it easy to use/buy Pepsi FOR ME and make me glad I brought it to my party, and I will buy and buy and buy.
I think Pepsi's Refresh Challenge is a great program, they just forgot one teeny (but awfully important) part: Tie the program to product purchases.
Research supports that cause marketing (for-profit/non-profit mutually beneficial, collaborative marketing programs) drives consumer loyalty, positive brand perception, and even purchase decisions. (see the Cone Inc, 2010 Cause Evolution Study and Edelman PR's 2010 GoodPurpose Study).
Current retail cause marketing programs show that it does indeed drive sales (see Macy's "Shop for a Cause," Bloomingdales's "Love Where You Live," and Lord & Taylor's "Shop Smart. Do Good.") All three department stores run versions of the same program - spend $XX on a "ticket" and you're entitled to XX% discount on all your purchases for that day, plus an additional XX% of a single purchase. All of the "ticket" purchase money goes local non-profits.
Had Pepsi, in some way, tied the program to purchase, I think they'd have still earned the positive associations, but also have boosted sales.
Interesting post - and I agree that revenue growth is not the only metric that counts - but in order to claim "success" show me a metric - even if it is a more positive perception of the brand - what was the base, what was the objective for improvement - what are the results? Absoulute numbers of unique media visitors and page views do not prove anything. More of my thoughts can be found on:
http://jrgrana.com/blog/2011/02/01/%E2%80%9Cthe-unexamined-life-is-not-worth-living%E2%80%9D-%E2%80%93-social-media-analysis/#comment-60
Regards
Z
I enjoyed your take on the Pepsi Refresh Project - raising some of social media’s potential paradoxes when it comes to results and value – tons of awareness, yet a drop in sales. But surely the two cannot be directly connected when all buzz in the online world was positive, as you duly noted this was most likely due to economic changes. I think what’s more important is they did achieve the objective that they set out towards. Also, with social media it is about the long-term image and value of a brand, and sometimes results are not always immediate.
Personally, I see this program as a success, especially since the Pepsi Refresh Project seems to be more of a philanthropic program versus a marketing, ad or promotional campaign which focuses on driving sales. In general, CSR efforts provide a great way to increase the overall perception of your brand, another good example of this was FedEx’s Custom Critical team helping the National Fish and Wildlife Foundation safely transport hundreds of sea turtle nests containing thousands of eggs to Florida’s Atlantic Coast, protecting the hatchlings from the Gulf oil spill. Social media offers the unique opportunity to truly connect with customers and build relationships with them, which over time drives long-term brand awareness, goodwill and more importantly, customer loyalty.
I look forward to seeing the results from this year’s Refresh program. Thanks for sharing this Erik!
Jennifer Rodriguez
Director of Community Outreach, Visible Technologies
To pin Pepsi's sales loss on this one, albeit major initiative is short-sighted in my opinion. Did Pepsi increase or decrease ad spending this year? Did they focus more on acquisitions or cost-cutting than growing sales? Did they put more efforts into other brands at the expense of the main Pepsi product line? I could go on and the point is there are probably hundreds of reasons for the negative percentage, and the article points out one major one, that the industry as a whole was down. My question is how much WORSE would the decline have been if they DIDN'T do such a good job with the Pepsi Refresh initiative???