The Pepsi Conversation

It’s like the Pepsi Challenge but for the digital generation, says CMO Jill Beraud.

That something different was about to happen at Pepsi became apparent in late October of 2008, when it unfurled its quirky new logo. It was circular, and red, white and blue like the old logo, but the white band in its midriff was now positioned at a rakish, gaping angle and looked like a smile.

Almost instantly, billboards featured the logo in place of the letter “O” in cheery words like WOW, HOORAY and FABULOUS. Some people loved it, others didn’t, but the possibility that this logo might come to represent something more than a soft drink wasn’t on anyone’s mind.

It is now. With the announcement of its very own $20 million public-grants initiative (see sidebar), Pepsi signaled its intention to make its brand stand for something greater than just an alternative to Coke. It also pointed toward a new model of marketing communications that really and truly engages shoppers, retailers and the brand in a long-term conversation about how to make the world a better place, one neighborhood at a time.

That sounds corny until you spend a little time online with the Pepsi Refresh Project, as the initiative is known. In fact, before you do another thing, you need to put down this magazine and visit refresheverything.com. We don’t want to see you back here until you’ve voted for at least 10 projects (and bully for you if you also nominate a project of your own).

Now that you have a sense of what Pepsi is talking about, it shouldn’t sound unreasonable to suggest that the logo and what it now represents might not only change how shoppers and retailers think about Pepsi, but also how marketers think about marketing.

It’s no longer about logos, commercials and brand benefits in the usual sense. It’s about a collective conversation and integrating the brand experience with a larger purpose.

That’s the direction now taking shape at PepsiCo Beverages Americas, led by Jill Beraud, its chief marketing officer and president, joint-ventures.

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What were some of the insights that led you to the Pepsi Refresh Project?

Number one was just the overarching insight that consumers don’t want a one-way dialogue anymore. They are much more participatory in brands and really want to share in the experience and influence the experience of brands. They are very interested in what brands stand for; it’s not just what brands sell, but what’s behind a brand.

Those two insights together made us think about making Pepsi Refresh more interactive. It’s similar to what we did with DEWmocracy, where we basically co-created brands with consumers and had them pick the formulas, the names, and the graphics.

It was so effective that it reinforced this new insight about consumers that they want a dialogue with brands and to participate in the brands. That was the first insight. The second insight is that consumers want to know what a brand stands for. Pepsi has, and always will, embody and fuel the spirit and optimism of youth.

When you say “consumers” whom are you talking about exactly?

Most people think it’s just Millennials, but it actually cuts across multiple cohorts. The most quoted fact is that 86 percent of Millennials will choose a charitable company over one that’s not. But 76 percent of female Boomers say the same thing.

Is there a special resonance with Pepsi Refresh among women?

It’s really women and men. This is not appealing to only one cohort group. That’s the beauty of this program.

But is there a particular audience that you’re going after with Pepsi Refresh?

Pepsi has always been about the new generation. We think about this as the Pepsi Challenge for the digital generation. This is going to be as big, if not bigger. One of the great surprises is that it is so appealing to every cohort group and across every state across the country.

If you look at who has submitted ideas, it’s across every age group: it’s Boomers, Millennials and Gen Xers. Everybody is participating. This is not about an age; this is really about an attitude.

How did you come to understand that attitude?

We are constantly talking to our consumers. One of the exciting parts of this new, digital, social-media craze is that there are so many different access points to consumers. There is obviously traditional research, but we’re always tapping into trying to understand what consumers are thinking about. We have different ways of tapping into that, including social media as well as various other techniques.

Have any surprising insights emerged since the campaign began?

One of the things that really astounded us is how viral this has become. During our first submission window, it took three days to reach our goal. With our second submission window, it took 16 hours. We just closed our third submission window, and it took under an hour to reach our goal. So, the biggest insight was that this was even bigger than we thought.

Have you noticed any interesting patterns in the kinds of projects that people are proposing?

We have six different categories for submissions, and we expected one of the six to pop more than the others. But it’s really consistent across all six groups. There’s just such a passion around all of these ideas.

Every day a new idea comes up that I get excited about. What excites me is that every month we get to support 32 ideas and create positive change at the local level.

That’s very significant. We’re not just helping one organization, or one idea; we’re really creating change on a very big scale, but at a local level.

What else has impressed you so far?

What’s impressed me is how much it’s connected not just our consumers, but also our employees, bottlers, and customers.

It enables us to have our brand stand for something unique, but also to customize programs for retailers. So, many of our customers have a unique Pepsi Refresh program that we co-op with them.

How have you involved retailers in the project?

All of our retailers have been so interested in this program because it’s easy to customize. So, each retailer can have its own Pepsi Refresh program and engage its own shoppers.

Safeway, for example, is having a separate Pepsi Refresh program where they focus on different topics each month. One month they are going to ask all of their shoppers for the best ideas in education and the next month they are going to ask for the best ideas in health, and so on. So, each of our customers can tailor things in a unique way.

Where does shopper marketing fit in?

We have local activation in-store, but again, each customer will tailor the program to their shoppers and obviously shopper insights will help drive each of these customized programs. This is becoming more and more important, as you know.

Is shopper marketing any different from old-fashioned sales promotion?

It’s significantly more sophisticated than just promotions. It’s a much more robust view of marketing. It’s driving consumer insights through nuanced customer programs and packaging, by channel.

Do you see a difference between consumers and shoppers?

It depends on the brand and the channel. With some of our brands, like Diet Pepsi, the shopper is the consumer. With Gatorade, we’ll have mom in a grocery store shopping for Gatorade but she’s purchasing it for her athletic son. In the convenience channel, the millennial guy will be purchasing a Mountain Dew. So, therefore the shopper will be the consumer.

Is there a difference in mindset between consumers and shoppers?

I think it’s evolved. The shopper today is different than the shopper several years ago. When consumers and shoppers are one and the same, they do more to prepare for shopping and are more engaged prior to the actual shopping experience.

Is shopper marketing more about sales or marketing?

I don’t think you can separate the two. The most effective marketer and the best brands are those that can build brand equity and drive sales.

Do you think that shopper marketing is here to stay?

The importance of shopper marketing continues to grow and grow and the capabilities that are necessary in shopper marketing continue to become more and more sophisticated. Shopper marketing is part of any marketer’s career path within PepsiCo.

Who actually leads the conversation — Pepsi or its shoppers?

With the Pepsi Refresh Project, we started the dialogue because we created the subject. But if you go on the website it is absolutely a two-way dialogue. I would take it one step further and say that it has become a community dialogue. The conversation is not just between Pepsi and a consumer, it’s between a Pepsi drinker and a Pepsi drinker. It’s really about the community.

Why do you include celebrities in a conversation among ordinary people?

Celebrities have always been a part of Pepsi’s DNA. And the truth is they got us a lot of publicity initially. At the same time, just the idea of doing the Pepsi Refresh Project is getting us so much earned media and attention.

But frankly we have so many celebrities who are calling us and wanting to be involved in the program as ordinary people — not as celebrities — which is very rewarding to us.

Could the same concept be applied to help refresh the Pepsi brand itself?

Stay tuned. Absolutely. It’s something that we’re considering as Pepsi Refresh evolves. We are going to continue to build on this as an idea. This program has so many legs and we’re getting such great ideas from consumers. It’s definitely something we’re considering.

What is the connection between this program and the new Pepsi logo?

The idea is to refresh the brand and create an optimistic view. So, it was all about optimism. We seeded the idea with the new logo and the Pepsi Refresh program is about activating the idea.

Some say there’s a similarity between the Obama and Pepsi logos.

If you look at it over the last 100 years, Pepsi’s logo has always been red, white and blue. This logo has roots in our heritage and our history.

Is there a connection to Obama’s message?

The general notion in America of needing and wanting to believe in the bigger idea is something that Obama spoke about, and Pepsi has always believed in being a catalyst for change. I think we both capitalized on that same idea.

How do you see the Refresh Project evolving over time?

We’re at the very beginning, so we’re going to be challenged in keeping it fresh and interesting. And we’re evolving those ideas as we speak because this is not a promotion; it’s an ongoing strategy. We’re seeing what things consumers respond to and we’ll probably get them involved in the dialogue as to how to refresh the program.

Will the Refresh concept translate overseas?

Absolutely. In fact, I just got back from a global senior-management meeting where we discussed introducing this program in Asia, the Middle East and Europe. We want to make sure that we have the infrastructure ready to do that, but they are very excited about rolling this program out. By the end of the year we will begin to do that.

Do you have a personal pet project or cause that you support?

On a personal level, outside of PepsiCo, I’m on the board of an organization called World of Children, a global organization that recognizes people who help children around the world.

So, it’s actually like the Nobel Prize for people who do great things for children. I’ve always cared about children and helping children in need because they can’t help themselves.

How hard was it to sit out the Super Bowl?

It was an effective strategy. The spirit of the program was impacting positive change, so we wanted to be consistent with that message.

You know, it was so controversial. We broke 23 years of history and really raised eyebrows, but actually we ended up getting more buzz about not advertising during the Super Bowl.

We had much more buzz in the months leading up to the Super Bowl than any other brand that advertised in the game. We had ten times more buzz than Coke.

Do you see this shift from traditional to social media as permanent?

There is a huge shift to social media, but I don’t think it’s at the expense of traditional media. The role of traditional media has changed, but it hasn’t been eliminated. I think it all works together in a very powerful way.

So, traditional media still work as well as they used to?

Absolutely. Do you remember when Victoria’s Secret launched its e-commerce site and had a fashion show on the internet? We advertised that on TV. Traditional and social media really reinforce one another.

It’s been a mix of both for the Pepsi Refresh Project. The first two weeks we were very heavy in TV. We continue to do TV and encourage people to vote and get involved. But Facebook and Twitter are also such powerful tools to get consumers engaged in the program.

Is there a way to measure that power?

We can track how many consumers come through Facebook. We have a phenomenal relationship with Facebook and have doubled our Facebook friends just in the first month. We are going to continue to evolve what we do with Facebook and create even more innovative programs with them and others.

Are you on Facebook or Twitter yourself, personally?

I absolutely have a Facebook page. If you’re going to be a good marketer today you have to experience what consumers are experiencing.

What have you learned from that?

How it’s almost another world. It is its own community with its own language and its own experience. And it’s so much fun. I always end up spending four or five times more time on Facebook than I ever planned to.

Are you also hooked on Twitter?

I’m more hooked on Facebook right now.

Will the Refresh Project change Pepsi’s image?

Pepsi has always been about a great tasting beverage and we’ve always been viewed as being innovative, fun and experimental. This is reinforcing that we are at the cutting edge of culture, innovation and fun.

Is the goal more about image than sales?

It’s about connecting with consumers and the whole consumer engagement model. When you have that great connection with consumers, you drive loyalty.

But you expect a quantifiable result of some kind.

Absolutely. And, frankly, since the beginning of the year we’ve had really terrific share gains. So, there are a lot of ways of measuring the success of this program.

You must be building an incredible database.

No question, but it’s not just about having a database; it’s about having meaningful conversations with consumers. So, it’s not just about the number of people we reach, but the quality of the engagement.

How might that database be helpful in the future?

The more we engage with our consumers, the more they want to engage with us. The more feedback we get and the more meaningful the conversation is, the tighter the bond with our consumers.

What is your greatest hope for the Refresh Project?

We want to impact local communities and that’s what we’re seeing. We’re excited about continuing to build Pepsi’s brand equity and to impact our communities and our customers’ communities in a positive way.

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Bottling Optimism

Our idea was that this year we’d try to shift the marketing and communications to something that’s truly walking the walk,” says Lee Clow, chief creative officer of TBWA Worldwide, explaining the thinking behind the Pepsi Refresh Project.

The idea, he continues, is “to develop a mechanism for young people to create ideas to make things better,” adding that this “will ultimately become part of the global behavior of the brand.”

Specifically, Pepsi “is dedicating at least $20 million through the end of the year for donations to local organizations and causes supported by the public in realms like health, arts and culture, the environment and education.” Consumers can participate by visiting a Pepsi website, refresheverything.com, and both submit as well as vote on cause-related ideas. Top vote-getters will receive grants of varying sizes.

While Pepsi’s initiative is backed by television commercials and other advertising, it also uses “social media like Facebook and Twitter” to spread the word.

Gene Liebel of Huge, a Pepsi agency for online media, says the use of social media shows how “a big brand is letting what used to be called the audience take part in what can become a movement.”

Pepsi is also sponsoring a reality show, If I Can Dream, on Hulu.com, which Hulu’s Jean-Paul Colaco says “amplifies” Pepsi’s advertising “by making it something people talk about, more of a social conversation.”

[Source: Stuart Elliott, The New York Times, 2/1/10]

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JILL BERAUD is chief marketing officer and president-joint ventures for PepsiCo Beverages Americas. Previously, she was CMO of Victoria’s Secret and began her career at Procter & Gamble.