Promotional advertising is a pivotal part of a consumer good product’s go to market

strategy. In recent years, digital media has acquired a larger share of those budgets.
Pepsi and Coca-Cola have both stepped up their online efforts to include social
media.

The way in which each brand integrates social media efforts with promotional
advertising and public relations say a lot about the personality of the company and
its culture.

The Pepsi challenge

Of the two giant beverage brands, Pepsi is the one that seems to have had the
greater identity transformation, although, seen side by side, they seem to have
borrowed significantly from each other. Pepsi’s logo is perceived to have changed
more dramatically over the years. Thanks to brand new, you can see how the earlier
chart that was making the rounds spoke to perception.

Pepsi’s greatest challenge turns out to be the recent decision to divert promotional
advertising budgets to a grant that each month funds ideas. The refreshing
everything project has predictably attracted much commentary in social media. The
way it works is you can submit an idea that will have a positive impact, or vote for
one. The blog associated with the project refreshes the news aspect and is created
with the intent to personalize it and build community.

The online community had mixed reviews about the project. From early cautions
about the program being a gamble upon its announcement, to posts that praised the
action and those that marveled at the program being seen as an alternative rather
than an adjunct to their Super Bowl ad campaign. Consumer habits are changing,
and social media has earned its place in the mix. Can it stand on its own without the
help of promotional advertising?

Is this new format shifting the responsibility from the corporation to the individual
consumer? We do need to think more strategically about our resources, and so do
brands. Will the social media halo extend to sales? This is the most important
question for a product company to ask itself.
Has Pepsi won by avoiding the Super Bowl? It has been getting a lot of media
coverage thanks to the PR value of its move. While fragmented branding is the 21st
century reality, many are starting to raise the question of whether these
philanthropic gestures are artificial sweeteners. Corporate social philanthropy
needs to be authentic to the core of the company, and contest fatigue is starting to
set it. Did Pepsi miss an opportunity to drive more traffic to its initiative, or to drive
more sales?

As expected, given the lack of must see TV support in the guise of a Super Bowl ad,
the initiative has also garnered the attention of mainstream media. The days when
mass-market media was the sole vehicle to reach an audience may be officially over.
How could we start reconciling again the purely entertainment value of some forms
of promotion, with the potential of sustainable programs grounded in social?

Coke changes formula

No reason to panic. The only one change they made to their formula is potentially
one of perception – from medicinal beverage to recreational drink. While rumors
that the company used to put real coke in it seem to be still holding true, the
quantity we’re talking about seems to be still quite small to make a big fuss over it
125 years later.

In the promotions department, coke’s Super Bowl spot contained charitable

elements and was tied to a social media campaign that pledged $500,000 to the Boys
& Girls Club of America. The company’s biggest buzz so far, in addition to its popular
Facebook page, is its new social media policy. Keep in mind that this is for 1 million
associates in 206 countries. It’s a feat of simplicity.

Coca Cola’s new online social media principles define three hierarchical levels of
responsibility for its workforce: designated subject matter experts; social media
certified spokespersons; and everyone else. Those not certified as spokespersons
may not speak on behalf of the company. Certified spokespeople may speak in the
company’s name but must refer difficult situations to subject matter experts. The
principles apply to all employees but only appear to provide complete guidance to
non-certified employees.
Coca-cola integrates many social media outposts and searches on its site. The most
remarkable aspect of what the company is doing though is not on the
communication end of things — it is on the product redesign side. I was at Coca-Cola
headquarters in Atlanta last fall and had the opportunity to meet David Butler, the
man who is redesigning Coke. If branding is fragmented in this new reality,
companies can and must create a central apparatus that is once specific and flexible,
one that can apply all over the world keeping its focus on customers.

Butler did just that at Coke by helping the company understand design on purpose
— to create value for the business through design and drive sales. Before it can
communicate to the world, a brand needs to be aligned internally, work as a system,
think about longevity, and cut through the visual clutter with identities that express
its core essence. Coke is focusing more on how the product is delivered, packaged
and experienced across the globe. Including how the company’s associates talk
about the brand in social networks. Has the company bought into the incomplete
manifesto for growth?

The company is also focusing more on the customer with its happiness theme.
Neither Atlanta-based interactive agency Definition 6 nor Coca-Cola pushed the
production with a publicity campaign. They let the brand’s considerable fan base
find the video and share it on their own. I don’t drink soda, yet this video gave me
the goose bumps! 1.5MM people had the same experience and shared it with their
friends.

Distribution networks

If the whole organization is a system, its distribution networks need to be part of

that system.

Coca-cola makes the introductions to more than 300 bottling partners on its Web
site. Pepsi Bottling Group is one network.

Distribution for brands today means a lot more. It means how the brand is passed
on from mouth to mouth through stories, testimonials, humor, fun, like in the Coca-
cola YouTube ad we watched a moment ago.
Market share

This is where the rubber meats the road. The market capitalizations of these
companies at close of business on Friday February 26, 2010 was:

The Coca Cola Company- $121.41BN

Pepsico, Inc.- $97.77BN

While Coca-Cola’s market share has been slipping, it still holds a significant
advantage. In recent years, foreign sales have been lifting the company during
recession.

Informal research in social networks

I posed the question on Twitter and FriendFeed on a late evening recently. I got
several responses from people. Specifically, 9 unique responses on Twitter, 31 on
FriendFeed, and 0 on Facebook. The number of votes is not proportional to the
number of followers for those accounts. It maps more to how people engage in each
network, which is a lesson that should not be lost on you.

The question was simple “Which one do you prefer? Why?”

I just used the image you see in this post as the visual, without even naming the
products. Who won? 25 Coke, 4 either one, 5 neither, 6 Pepsi. Remember that it was
a moment in extremely active streams with people doing and sharing all sorts of
other things, including winter Olympics news. Just as if you dropped a question in
any social space.

You will push back that it’s not scientific and there isn’t enough data to be
statistically significant. That may be correct. Qualitative research is important,
though, and in a Web 2.0 world there are fun ways to conduct informal, qualitative
sampling. Not just by counting the numbers. What does the commentary add?
Context.

Remember that I did not skew the question in any way and that Pepsi just ran a
massively talked-about social media campaign — talked about in the same space
where I asked the question. Pepsi launched and maintains a “room” with 615
subscribers on FirendFeed, which is where I got the most votes for Coke.

Tone, preference, and commentary — like Coke is less sweet, it has a richer taste,
etc. — were offered for Coke, with Diet Coke winning the greater share of
commentary. To note that among those mentioning Pepsi, the new “Pepsi has
brought back real sugar in their Retro packaging” was mentioned.

Who won? Look at the market capitalization and the social integration for each
brand. Then consider customer preference. The winning brand is the one that stays
truer to itself.