The Quisenblog

I’m talking about the soft drink marketers’ uses of Social Media here.

As you may recall, Pepsi was one of the first big-name marketers to aggressively go “all-in” in a Social Media sense, with its much talked-about “Pepsi Refresh Project.” This was a commitment from Pepsi to support worthwhile causes recommended and voted on by its customers and fans. Pepsi used Social Media (primarily Facebook) to elicit suggestions, to “crowd source” the causes (have fans and friends vote on them), and to report news developments.

What gathered a lot of media attention for Pepsi wasn’t so much the program itself, but the fact that Pepsi was pulling back in its traditional media spending in order to fund this program. As it turns out, the brand really didn’t need to cut back much, just the couple of spots it traditionally ran in the Super Bowl.

In the year following “Pepsi Refresh,” Pepsi’s flagship product slipped into third place in the soft drink category (behind Diet Coke). Many Social Media naysayers were quick to blame this slide on Pepsi’s move from mass media to Social Media. While I, for one, don’t think Pepsi’s descent in the cola wars was due to the fact that it didn’t run a couple of Super Bowl spots (more on that in this post), I do think the marketer dropped the ball when it came to defining and managing the “Pepsi Refresh” program. Specifically, I take Pepsi to task for three key reasons:

1. The focus was more on the “crowd sourcing” part of the program than in the good works themselves. Pepsi seemed to be more interested in social media for social media’s sake rather than dedicated to a specific cause and serving as a catalyst for building a community of fans who also supported it. Social Media is most effective when it is used to amplify a strategy, not become one.
2. The program didn’t have a clear mission. Instead of focusing on a clear, single goal (for example, fresh drinking water in third-world countries), suggestions from fans were all over the map. Many were geographically limited, so the Pepsi community as a whole would not benefit or see the results. If you’re going to start a movement (which is what Social Media at its best is capable of doing), you need to have a clear, succinct, non-compromising vision of what it is you will do and how specifically your audience can contribute and participate.
3. The program didn’t treat all community members fairly. The more active you were in Social Media, the more influence you had over the process. There were charges, in fact, of cheating on the part of some charitable entities in order to extort funds from Pepsi. This is not the kind of PR you want.

Contrast what Pepsi did more than a year ago to what Coke is doing now. Coke has teamed with the World Wildlife Fund to help preserve the habitat of the Arctic Polar Bear. Promoted by both mass media and Social Media, this program spells out exactly what the marketer intends to do (donate up to $2 million for Arctic habitat preservation over five years) and how the Coke community can help support (purchase cans and bottle of Coke with the polar bears on it). Simple. Elegant. Easy to understand. Easy to take part in. A cause that is hard to say “no” to. By partnering with WWF, Coke also aligned itself with a an organization which is beyond reproach, giving the program more legitimacy. What’s more, when you see someone drinking a Coke from a polar bear can, you immediately identify him as a fellow Arctic preservationist.

Of course, I do have some issues with this campaign as well. An annual donation of just $500,000 for an organization that has annual sales in the billions is less than a drop in the bucket. Chances are, Coke is spending at least 20 times that amount in paid media promoting this campaign alone. Hey Coke. Don’t be so chintzy. Increase your contributions ten fold.

In case you haven’t seen it, here is the spot Coke is running promoting its Save the Arctic efforts:

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Early this year, Pepsi announced its “Pepsi Refresh Project,” which was a way of allowing the “followers” of Pepsi in Social Media to nominate worthwhile ideas or public service projects Pepsi could fund.

So far, the program has been a win/win for Pepsi. The soft drink maker received plenty of media attention for its Refresh Project, and it gave it a chance to connect with its fans and followers in a meaningful way.

In light of the recent Gulf disaster, Pepsi expanded its Refresh Project into a “Do Good for the Gulf” Refresh campaign. Pepsi has pledged $1.3 million to consumer submitted ideas that could “refresh the communities of the Gulf states.” Pepsi invited the public to submit ideas through July 16. Starting August 2, consumers can vote on the ideas they like best. Finalists will be announced on September 2, and grants will be awarded on September 22.

On the surface, this initiative seems to hit all the right notes. It’s a natural way to extend Pepsi’s Social Media campaign while doing some much-needed good. But to the skeptical part of me, this just doesn’t smell right. By tying itself to a major disaster, the company has to carefully walk the line between legitimate cause marketing and shameless self promotion. Is the company’s driving intention to help the residents of the Gulf, or is it to promote the Pepsi brand?

Here are a few of my reservations:

1) The amount pledged. Hey $1.3 million isn’t chump change by any stretch of the imagination. But knowing the inner workings of corporate marketing/PR departments, I can easily imagine the company is paying ten times that amount to promote and administer the program. It’s like those solicitations you get to help feed the children of Africa, but when you look into the financials of the organization, you find out that only 5 cents of your dollar goes for food. In other words, if Pepsi’s #1 concern is providing for Gulf residents, it could do better.

2) The company’s involvement in the “crowd sourcing” part of this project. The focus strictly on Social Media means the system will be gamed—heavy users Social Media will have more of a say than your average Gulf resident. While that fits with the original intention and structure of the Refresh Project, it feels somewhat ham-handed for dealing with people’s legitimate needs and concerns.

3) The very public way the company is going about this promotion. It seems a little too “corporate” and well-planned. Disasters are messy. Carefully orchestrated philanthropy feels out of place. For an example of a company that did it right, think back to WalMart in the days following Hurricane Katrina. With no fanfare, the company’s stores loaded tens of thousands of bottles of fresh water on its trucks and delivered them to needy residents before the media even showed up.

There’s nothing wrong with an organization striving to get noticed for its good works. If I were advising Pepsi on how to follow through on this project, here’s what I’d tell them:

1) Find out what the needs are NOW and address them. Why wait until the end of September to actually do something? The days immediately following a disaster are when the needs and opportunities are most critical. Find out what needs aren’t being addressed now, and address them. If there’s a need for more shovels or graders to comb the beaches, provide them. If volunteers need accommodations, equipment, hazmat suits or respirators (or cell phones to call home), provide them. Go ahead and collect nominations from the Facebook crowd, but don’t let them lead you on this.

2) Involve the Pepsi community as a whole. Allow folks beyond the Gulf in California or Nebraska or Idaho to contribute to the cause. Set up a dollar-for-dollar match campaign with specific projects in mind. Or start a general Gulf Fund where the company would handle all administrative expenses so every dollar goes to the cause, whether its shrimp fishermen’s families, bankrupted hotel operators or whatever.

3) Make a long-term pledge. Don’t bug out as soon as the story falls off the front page. Commit that “five cents of every Pepsi product purchased will go to Gulf aid,” or something like that.

4) Don’t focus on getting attention. No need to string huge Pepsi banners on the beaches, put logos everywhere and arrange for press briefings. Just get out there and do what you know needs done. People will notice. Stories will spread. This will be more powerful than an orchestrated Social Media campaign.

Public skepticism of corporations is high right now. The first question many consumers will ask of your good works is “What’s in it for you?” It pays to be as transparent as possible. If your #1 intention is to do good, then do good. Don’t worry about how you can milk your efforts.

Posted by Mickey

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Remember Jolt Cola? It was the original energy drink.

Created in 1985, the brand was touted as the soft drink “with all the sugar and twice the caffeine” and proud of it. In essence, it was the first “energy drink” (before anyone knew what that was) to come onto the American scene more than 20 years before anyone heard of
Red Bull.

Today, as Red Bull sells more than three billion cans worldwide (yes, billion), Jolt is little more than a novelty. How was it that the brand that essentially created a category and had a two-decade head start fell so quickly into the realm of irrelevance? While there are many factors that one could point to to explain the runaway success of Red Bull, for me it fundamentally comes down to the fact that management of Jolt Cola did not understand which business they were in.

Positioned as the “highly-caffeinated cola,” Jolt saw itself as competing in the soft drink category. It was a cola
for people who wanted a little more of a rush. That meant going head-to-head against behemoths like Coke
and Pepsi.

Its bet was that the brand could siphon off enough iconoclastic Coke and Pepsi drinkers to create its own space within the soft drink category. Its uniqueness never proved to be enough to carve out a niche in the über-competitive, shelf-space stingy, price-sensitive soft drink category. Though it grew a limited yet loyal following in some markets, primarily such social “misfits” as of nascent hackers, computer programmers, gamers and bike messengers, Jolt could never make meaningful inroads into the mainstream. They were always just another cola alternative.

Red Bull, on the other hand, created a category.

Everything about the product screamed, “we’re different,” from the cranberry red appearance to the funky taste to the signature small-sized metallic cans. Seeing someone carrying around a Red Bull can was like the first time you saw someone with those tell-tale white iPod earphones. “What is that?” you can’t help but ask.

Another key marketing difference is that Red Bull didn’t restrict itself to appealing to a limited audience. In the words of Norbert Krailhamer, Red Bull’s Director of Group Marketing and Sales, “(We) did not define a specific demographic segment as (our) target market; we have only people who are mentally fatigued, physically fatigued, or both.”

It takes a lot of guts and a lot of resources to venture out and create your own category. Red Bull recognized there was a quantifiable market for “a drink that gives you a boost.” As such it did not need to compete with The Big Boys of the beverage category.

Bottom line, Jolt was late to come to the realization that there was a mainstream market for energy drinks, and by the time it had dawned on them, people were programmed to see them as a soft drink. Red Bull, on the other hand, was never seen as a “soft drink.”

So this word of caution: Just because you’re first, doesn’t mean you’ll be #1.

Posted by Mickey

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