Pepsi’s New Space War

December 18th, 2009 by Harrumpher Leave a reply »

Just let the term roll around in your cranium — space salesman.

From my many days as a magazine writer or editor, I knew dozens of them well. To a one, they had limitless ambition and zero shame. They sold advertising in inches, fractional and full pages, spreads and more. That was the space they sold.

Of course, what they really sold was both hope and fear. Advertisers anticipated that targeted displays of their products or services would bring sales and profits (hope). They also knew too well that their competitors would aim for the same customer in the same magazines, and just maybe grab market share if they did not match their ad quality and quantity (fear).

From my newspaper days, I had see similar drives by the soft goods/alcohol/toy and other advertisers. Chums in broadcast said it was much the same there.

This mass and ubiquitous selling of the intangible only works when media successfully sells its own value. Controlled-circulation magazines, for example, first prove they have only great potential customers reading their freely distributed issues. They get subscribers to qualify, which generally means filling out a postal card claiming to be in the business, thus a target for advertisers as well as worthy to read about the industry. As important, the magazines pay auditing companies to verify their circulation in numbers and qualification.

Trust Us

Then they set their ad rates to match the alleged value of say 32,000 or three or 100 times that subscribers, a.k.a. readers representing companies just waiting to buy your stuff.

TV and radio were much the same, with the added wrinkle of target demographics. They could claim the best age clusters or zip codes of audience and such. Then each show would be its own product offering so many of this and that and so much market share in a time slot and day.

We all knew it was kind of a house of cards or more accurately like the emperor’s new clothes. The claims that the space or time really translated into advertisers’ sales and profits have always been spongy. Except where advertisers can include a rebate coupon or such that they can actually count, who can really attribute greater sales to a particular ad placement.

What advertisers do know beyond coupons is that certain ad campaigns are more effective than others. They rarely have a control group that can isolate the effectiveness of placements in one medium or one network or magazine. They are too busy with scattershot advertising (fear again).  On the other hand, if they switch campaigns and see a big uptick or plunge in sales, pow, zap, that’s almost tangible!

So, to that PepsiCo of the headline, it is blowing off the Super Bowl, says the AP. That’s gutsy, surprising, risky, and maybe trendsetting. You can be damned sure that other advertisers — beyond sugary drink makers — are paying attention.

For background:

  • Pepsi has advertised at the SBs for 23 years
  • Its chip folk, Frito-Lay will have spots in this year’s game
  • Last year, it spent $33 million on SB ads
  • Those ads this year should average $3 million per 30 second spot

A Million Here…

Pepsi along with FedEx was plain about its reasoning. Those companies said ads were too expensive. Moreover, Pepsi’s Nicole Bradley said, “In 2010, each of our beverage brands has a strategy and marketing platform that will be less about a singular event and more about a movement.”

Instead, the company will concentrate on online efforts. You can buy a lot of online presence for the millions it would have spent in the highly competitive, even mind-numbing, SB ad undercard.

We are to look for its Pepsi Refresh Project beginning in January…on the net.

So there is Pepsi charging off almost solo on its own safari. If it brings back higher customer poll numbers and even holds or gains market share domestically, that will be huge. Others would be sure to follow. Perhaps the absurd SB ad costs might drop and some companies might say they have brand recognition and no longer want to spend there, rather they might look more to online and heavens above, print.

I don’t drink soda, or tonic as we say up here. I get my bubbles from seltzer, ale and occasionally champagne. Yet, I have a 16-year-old Mountain Dew doer and from business curiosity, I’ll be watching.

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