Gatorade mission control: PepsiCo model for best practice
Gatorade mission control: PepsiCo model for best practice
A view from Nicola Clark

A digital future: The new Pepsi challenge

Rivalry with Coke has taken a back seat as PepsiCo focuses on the next big thing in digital marketing.

For marketers the world over, no battle of the brands can quite match the rivalry between Pepsi and Coca-Cola. It might come as a surprise, therefore, that Bonin Bough, global director of digital and social media at PepsiCo, does not have Coke's market share branded onto his brain. 'Our focus is less about us versus them and more about how we create platforms to engage with consumers on a long-term basis,' he says.

In line with this strategy, while Coca-Cola has most recently been looking back to bask in the glory of 125 years of the brand, a landmark it celebrated with a traditional marketing campaign, PepsiCo has its eyes trained on the future. More specifically, it is attempt-ing to decipher just what that future will bring to consumers in the fast-moving digital sphere.

This month, it has launched the PepsiCo10 programme across Europe, an initiative first rolled out in the US 12 months ago. The initiative aims to find 10 of the most promising start-up entrepreneurs and businesses - from service technology social media and community-based marketing, mobile marketing, location-based technology, digital video and gaming or learning sectors. Selected companies will get the opportunity to work with PepsiCo in the UK, to deliver pilots of their technology to the group's brands, in a strategy designed to place PepsiCo at the forefront of digital innovation.

Partnering change

Last year's chosen few in the US included TableTop Media, a company that provides digital screens in restaur-ants, which, among other things, enable consumers to simply swipe out with their credit cards when they are ready to leave. Another tie-up was with Evil Genius Designs, a company that creates interactive games that are shown on huge screens in venues where consumers are waiting in queues.

It is a bold move for PepsiCo UK to roll out the project on a similar scale in the UK market, where its portfolio of brands, led by its flagship Pepsi range, Walkers Crisps, Tropicana and Quaker Oats, is smaller.

The energetic Bough describes the project as part of his broader drive to ensure that PepsiCo has what he terms 'digital fitness'. 'You need to do a lot of experimentation and be fearless about what you do. Innovation is not just happening within the four walls of your company or the four walls of your agency. From farmers in India using mobile phones to make micro-payments to the broader social movements happening on Facebook and Google, there are transformational social changes driven by digital that are affecting businesses at every level.'

There is no question that Bough is passionate about the role PepsiCo can play in engaging with entrepreneurs.

In many ways, digital innovation itself has become a marketing platform - in March, for the first time, apps from Apple's App Store outsold the amount of music purchased in its iTunes store.

The digital balance

The flagship Pepsi brand already has credibility in the social space, having last year made a bold statement when it skipped TV advertising in the Super Bowl after 23 consecutive years.

Instead of pouring millions into the usual big-budget TV ad, it chose to give away $20m in funds as part of its 'Pepsi Refresh' CSR initiative, backed by a social media campaign. Arguably, by choosing not to advertise during Super Bowl, Pepsi enjoyed a golden PR moment. Rather than being a stunt, however, the company is adamant that the move reflects a change in its approach to marketing.

However, PepsiCo is not simply sweeping away all its existing marketing platforms and structures to make way for a predominantly digital strategy.

'We don't see our (digital activity) as superseding everything else we do, but we need to shift our thinking from simply counting impressions to making genuine connections,' explains Bough. 'Every brand should see itself as a media-owner. We can bring scale to any concept, whether through putting technology on packs, on point-of-sale materials or integrating it into our abovethe-line messaging.'

Nigel Walley, managing director of media strategy consultancy Decipher, says that while PepsiCo's strategy is certainly a leap on from FMCG's usual pledge to spend 10% of its budgets on digital, he remains sceptical.

'Group marketing functions as an incubator of potential entrepreneurial and business ideas looks great on Power Point presentations, but brands like Unilever followed this path during the dotcom boom and it simply doesn't work,' he claims. 'Every now and then it becomes a breakthrough trend, but all it really reflects is the sense of malaise among its existing agencies.'

A model for innovation?

Cutting out the middle man and going straight to developers and entrepren-eurs for ideas is already popular with brand-owning companies. Kate Rydings, digital development manager at Unilever, says the company's biggest challenge is keeping up and, ideally, being ahead of the game.

'When you are working on big corporate brands the challenge is that channels are always changing and it takes a year for that to even reach the top,' she says. 'We need to be six months ahead with digital development.'

Jon Ghazi, business development director at communications agency OMD, which worked with PepsiCo on the project, says that from a strategic perspective the initiative shows the company's understanding of the need to be in 'beta mode'. In effect, by acting as a fast-moving technology company, it is positioning itself as a champion of innovation. 'There is a shared belief in the power of innovation and to make that happen you have to have a culture which allows failure,' adds Ghazi.

However, Martin Bailie, executive planning director at digital specialist Glue Isobar, says the growing number of brands looking outside adland for innovation reflects the 'dismal failure of the traditional agency model' when it comes to delivering innovation. 'There are only a few companies that can really deliver on innovation and are tapped into the right conversations digitally,' he claims.

For its part, PepsiCo has put its money where its mouth is when it comes to digital innovation and insiders say that the PepsiCo10 project has buy-in across the business. There is certainly no question that Bough has immersed himself in social media.

For a marketer who sees a future in space travel, the NASA-style 'mission control' centre he created - essentially a social-media-monitoring 'war room' for Pepsico's Gatorade brand - is clearly close to Bough's heart. The hub (see main picture) was created by PepsiCo to monitor the brand in real time, enabling it to participate in more than 2000 social-media conversations, with a view to turning these insights into actions to increase brand engagement. The initiative is viewed as a model of best practice across the business.

For Bough, it is not only about tapping into these conversations: he is actively leading them. He may not be able to pinpoint the next Mark Zucker-berg, but instead cites something more tangible for brands - the growing importance of 'purse power' online.

'If you look back on what the "Avon Lady" did for the family economy, the growth of women using technology will have an equally transformative effect on society,' he enthuses.

'This trend of use is so powerful, there is a unique opportunity for brands to reach out to the digitally connected woman.'

Rewind 36 years and Pepsi's marketing challenge seemed much simpler: a blind taste-test between Coke and Pepsi, which took place in shopping malls across the US. The results of the Pepsi Challenge suggested that more Americans preferred Pepsi.

Today, it seems that PepsiCo has set itself an even tougher marketing challenge. With Bough at the helm, a digitally-led future is the choice of a new PepsiCo generation.


Real-time marketing

'Relationships with customers have become real-time relationships, and managing these is definitely a key challenge.'

Companies are not geared up structurally for digital marketing

'Structurally, it is key to have digital running across the entire company. From packaging to the supply chain, the innovation agenda must be digitally focused.'

Grappling with the future of 'big data'

'There are more entry points and measurement tools than ever when it comes to connecting with customers. Tracking and monitoring these relationships is crucial.'

Privacy is a big issue

'Privacy is going to be a huge challenge for many brands. Protecting consumers' privacy needs to be a philosophy companies live by, not simply a set of rules to adhere to.'


Mobile is central

'It isn't merely a case of rising consumer adoption, consumers are adopting mobile in more aspects of their lives than ever before. Localisation via mobile phones is another key trend we are adopting.'

The possibilities of gaming are almost endless

'We need to stop thinking about gaming in a finite way. Farmville has integrated human elements into all aspects of the game and it's bigger than TV in terms of reach. Then there is console gaming. But the power of the casual game, which can be downloaded and played just once, should not be underestimated.'

Digital in-store will add a new layer to purchasing

'From QR Code-scanning in stores such as Home Depot to our ability to provide customers with in-store recipes, or tickets to events in-store through digital channels, this is huge. Digital in-store is going to be a big channel.

Once you factor in the added layer of consumers' purchasing habits, it becomes a mechanism by which we can drive loyalty at point of sale.'

There will be a second screen around the TV

'Watch what happens to the area around the couch. We are going to see app stores on TVs and consumers running Twitter feeds in parallel to sports matches. This is one to watch.'

Getting to grips with real -time marketing is crucial

'How you deliver real-time marketing solutions and how you can deliver these solutions with scale are two of the biggest challenges facing brands today.'