Pepsi’s Super Bowl Strategy

Every year, millions of people tune in to watch the Super Bowl. Some are watching because their team is playing for the title, others are watching simply for the love of the game and the rest are watching for the entertainment provided by the infamous Super Bowl commercials. Millions of dollars are spent on commercial time during the game. Last year, companies paid $3 million for every 30-second spot. This year, the price has gone down to as low as $2.5 million for a 30-second spot, reflecting the current economy.

While the cost is lower than last year, some big companies have decided not to run ads during the Super Bowl at all this year. The game, scheduled to air on February 7 on CBS, will not be showing ads by FedEx, General Motors or Pepsi. This is the second consecutive year that FedEx has chosen to not buy any ad spots, and GM spokesman Tom Henderson said, “We are going to focus our resources in other areas.”

According to The Huffington Post, “Pepsi was one of the biggest advertisers in last year’s game and has advertised every year since 1987.” But Pepsi’s reason for not running any ads this year is different from the other companies’ reasons. Instead of buying ad spots during the Super Bowl, Pepsi is running a social media campaign that started January 13. The Pepsi Refresh Project is a community-based campaign that allows people to nominate and vote for the community service project, charity, small business, nonprofit organization or anything else that most voters would like to see receive financial support from Pepsi. There will be up to $1.3 million in grants distributed each month to the winning nominees.

As social media continues to grow, many businesses are finding ways to use the different mediums to reach potential and current customers. According to a recent article on SunSentinel.com, companies such as Zappos.com and Best Buy are utilizing social media outlets like Twitter to help them better reach their customers. So is Pepsi trying to do the same thing? Are they simply trying to be smarter with their money during this rough economy, or are they moving in a new direction with their marketing strategies?

If Pepsi is moving their marketing strategies in a new direction, is the Super Bowl the smartest time to do so? According to Fran Kelly, chief executive at Arnold Worldwide, in an article on Boston.com, many companies are not buying ad times during the Super Bowl because it is too expensive. She said, “For a lot of our big clients that are advertising year round, they don’t want to spend the time or money to do a Super Bowl ad.”

But according to Andrew Graff, chief executive of Allen & Gerritsen and chairman of The Ad Club of Boston, “Viewers don’t skip over the Super Bowl spots.’’

Many people don’t watch every day commercials; they leave the room, mute the TV or fast forward through them with today’s technology. It is highly unlikely that anyone is ever going to be fast forwarding through the Super Bowl commercials. So the question is, if Pepsi is trying to save money, should they pull their regular commercials that run every other time during the year and save the money for Super Bowl ads when more viewers are basically guaranteed to watch? But, if instead of saving money they are trying to generate attention around what they are doing in place of running ads during the Super Bowl, their new strategy has a chance of being successful.

Nicole Doherty