Can a brand destroy an industry?

Pepsi has had a pretty rough time lately.  Not only has it seen its position in the US drop to #3, behind Diet Coke, but it has also been the poster child to all those seeking to vilify the hubris around Social media – examples here, here and here.

The main issue? Pepsi’s decision in the last couple of years to de-invest in traditional ATL (namely TV) in place of Social media spending and a philanthropic campaign –  Pepsi Refresh – rather than shifting boxes.

The end result:

  • Pepsi market share decreased by c. 5% (which given the market size means a loss of over $350 million.
  • As a result (and as I mentioned before) Pepsi lost its #2 slot
  • Its market share erosion accelerated by 8 times compared to the previous year

Figure courtesy of AdContrarian

So does this mean that all SM activity is doomed to failure? Of course not.  Like anything in popular media, it’s very easy for things to blow out of proportion.

Pepsi’s failure is one that most brands face when doing SM.  They change their focus from one of selling to engagement.  Engagement is great, but only if it leads to a sale.  If it does not, you are simply flushing money down the drain.  My perception is also that this campaign became silo-ed and not integrated (to the sales process).

Different industries will require different means of communicating – some with a great emphasis on digital, others not.  Clearly Pepsi is one that does require it because of a strong and powerful competitor.  But more than that, its campaigns need to go through the entire marketing and sales.

For full disclosure, I do like the premise of the project and I certainly think that the cause is worthy. But it will only work if it can be financed and it can only be financed with sales of bottles.

What Pepsi could’ve done is created the Pepsi Refresh project but then say that from every bottle sold a certain % would go to the project and that Pepsi would then match that over the top.  This could then be supported with TV ads selling the bottle (aided by the project), online ads selling the bottle (aided by the project) and SM depicting the project.  Alternatively they could’ve also just joined up with pre-existing projects lessening the infrastructure costs and benefiting from that project’s brand.

Doing it this way, Pepsi would’ve sold more bottles, given more money to projects and built on that coherent and integrated form.

What’s the impact of this on SM? Certainly not that it is doomed or not worth the effort. Simply, any activity needs to be thought through, integrated and, ultimately, aimed at generating a sale. In Pepsi’s world that needs to be sooner rather than later.


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