How Pepsi's crowd-sourced ads beat the Super Bowl beer spots

February 10, 2011: 11:51 AM ET

Pepsi cut out the market research middleman and let users make and vote on ads. Result? Most memorable Super Bowl ad of 2011.

Apparently, a video of a pug knocking down a glass door on top of some guy is a good way to sell junk food. But Pepsi didn't spend millions doing market research to come up with the concept, called "Pug Attack." Instead, the company leveraged its most valuable marketing device: you.

The pug ad was part of the "Crash the Super Bowl" contest, which Doritos has been doing for five years. This year, the contest was fueled by a new collaboration between Pepsi's (PEP) Pepsi Max soft drink and corporate cousin Frito-Lay chip brand Doritos. The contest is one of several efforts by Pepsi not just to engage its consumers in social media, but to start deeply-involved, closely-watched dialogues with Pepsi-drinkers.

Besides "Crash the Super Bowl" Pepsi is re-launching its online charity campaign called "Pepsi Refresh" for the second time in 2011. In 2009 Pepsi launched a "DEWmocracy" campaign around its Mountain Dew brand that asked consumers to vote on new flavors for the drink that were released in 2010.

The Pepsi marketing team has had to relinquish a certain amount of control to buyers to host these kinds of projects. But the potential payoff is huge. Mostly because those conversations don't happen in a void—Pepsi is always watching, and often, Pepsi marketing teams respond in real time to tweets, comments and Facebook messages.

It's a high volume process. Every day, Pepsi's Refresh site receives 20,000 comments, according to Shiv Singh, Head of Digital for PepsiCo in North America. "We are starting to get a pulse on what America cares about on such a huge scale. It's all online, so we can analyze it and see these conversations in real time. It's mind-blowing."

These online projects also help Pepsi understand the language to use with consumers by watching how they talk to one another, says Singh. For instance, Pepsi will use what it has learned from marketing research on the Millennials generation and the lexicon in the commentary on the Refresh site to reshape the presentation in the second version of the Pepsi Refresh project—from the titles of categories, down to the syntax.

Pepsi started the Refresh project last year. Instead of buying Super Bowl ads, it offered grant money to causes that consumers could vote for online. Pepsi has doled out over $20 million in grant money to winners. And while the votes and related commentary rolled in, the process churned up all kinds of information about Pepsi consumers.

"They expect Pepsi to be fun, light and refreshing and to be a very positive, energetic force in the world—one that's open and inclusive and full of life," says Singh. "Whenever we do anything that moves away from that, we definitely hear from them."

This year, Pepsi returned to the Super Bowl ads with a vengeance. For "Crash the Superbowl", Pepsi Max and Doritos ceded the advertising to consumers, who competed by submitting Super Bowl spots. Consumers, again, voted on the spots. The winning ones aired during the game.

They nailed it. According to analytics agency Ace Metrix, the Pepsi ads scored higher than most beer brands, says CEO Peter Daboll. "Certainly Doritos and Pepsi Max are the anti-celebrity ads. I mean, basically, people filmed these in their garages, and they actually did better than some of the high-priced ads with celebrities."

The contestants can also be evangelists. For part of the Doritos, Pepsi contest companies threw a Superbowl party for the contest winners. "They are some of the most inspiring, talented people that I've ever met," says Amy Wirtanen, director of Pepsi marketing. "They love Pepsi Max, they eat Doritos continuously."

But that kind of love, and intense social media monitoring online has a flipside.

"At some level our consumers are doing more of the marketing for us, and that's lovely and it makes our jobs easier," says Singh." But they also expect and assume that whatever we do be of an incredibly high standard."

He says that Pepsi consumers have specific views about the future of the company and the future in America, and Pepsi has to try to align itself with those values. "That's not an easy thing because those values shift and change with time."

But challenges aside, Singh says that Pepsi's strategy going forward will be to integrate consumers even more. This means that certain promotions, much like the Refresh project, will focus less on products than on the brand as a platform for people to have valuable, data-rich conversations. And Pepsi, subtly and from the scaffold, will listen.

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About This Author
Shelley DuBois
Shelley DuBois
Writer - Reporter, Fortune

Shelley DuBois writes on management issues for Fortune.com. Before joining Fortune, she was a producer for National Public Radio's Science Friday and worked for Wired. Shelley has a graduate degree in science, health and environmental reporting from New York University. She lives in Brooklyn.

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