Last year executives at PepsiCo made a rather bold move: they would spend less money promoting the Pepsi brand through advertising and invest instead in helping communities. To bring the idea to life, they created the Pepsi Refresh Project, inviting consumers to submit applications and vote for the most promising ideas. Pepsi then funded the most popular programs.
How did it all work out?
It appears not too well. Pepsi is getting clobbered, with declining sales and a falling market share. Pepsi now trails both Coke and Diet Coke. Not surprisingly, the company is changing course, boosting advertising spending and developing new creative promoting Pepsi.
There is a lot to learn from Pepsi’s experience.
First, people like companies that do good things in the community but this doesn’t necessarily drive purchases. People don’t pick up a Pepsi because the company built a playground in Omaha. They pick up a Pepsi because they are thirsty and want refreshment.
Second, be careful what people tell you. I suspect the team at PepsiCo did a lot of research on the Pepsi Refresh Project and heard from consumers that this was just a terrific idea. Indeed, I bet people said that more companies should do exactly this sort of thing, cutting self-serving advertising and instead investing in making the world a better place.
The problem is that there is a big difference between what people say they will do and what they actually do. Confusing these two things is a consumer research trap.
Third, it is always risky to promote your good works; it looks a bit self-serving and invites criticism. Pepsi has taken a lot of flak for the way they administered the program; the overall feedback has been rather mixed. Pepsi is also now stuck with it; cutting the program would be difficult. It would look rather, well, awkward to announce, “Well, so much for saving the world. We’re canceling that program and doing a sponsorship deal with Kesha instead.”