Pepsi is not only abandoning traditional marketing, it is abandoning a 23 year old tradition of Super Bowl advertising and replacing it with social media marketing. The tens of millions of dollars spent on Super Bowl advertising will certainly buy a lot of social media marketing – the question is, will it be a smart move? I think it will and here’s why.
The Super Bowl is a one dimensional market when it comes to geographic location and that dimension is the US market. Pepsi has a strong presence in the US, so the time is probably right to look at other markets where their presence is not so strong. It is also worth pointing out that they will get plenty of mileage in the US by simply making this announcement.
Geographical regions such as Europe and Asia (particularly China) are huge and Pepsi doesn’t have a large following in these regions. China, in particular, is interesting given the huge penetration made by Coke; this may provide a clue to Pepsi’s thinking. China is also one of the largest users of social media. So if asked how Pepsi could make an impact in China – the answer may be through social media marketing.
There are many other advantages, of course. Television advertising is very much a one shot wonder – even the Super Bowl. It needs to be followed up with newspaper, billboard and in-store marketing. Social media marketing is a long term strategy that will continue to produce results down the road. They will still need the follow-up marketing, however the total cost will be far lower. This means they can repeat the exercise across several geographical regions and still spend less than their current Super Bowl outlay.
Pepsi is not the first to realize the power of social media marketing. Pepsi is probably one of the biggest in terms of dollars spent on TV advertising. What will be interesting to follow is whether or not Coke will respond in a similar way and what sort of influence this will have on other businesses that have been considering social media marketing. When the big boys decide to change the rules of the game, you know it’s time to take notice.
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