Tuesday, March 22, 2011

Social Tuesday - Ad Contrarian Right Message, Wrong Case Study - Pepsi

This week Bob Hoffman one of my favorite bloggers took shots at Social Media and specifically Pepsi as his case study. I am ok with his bashing Social Media. My view of business is from the CEO/CFO standpoint. Not marketing. Marketers are suckers. They snow each other all the time. It drives me crazy. Social Media Marketers tend to be the worst over all. It is very hard weeding through the Bull Shit. You want to know why I am such a dick sometimes by bashing my industry. Because I am CEO not CMO not someone making a cool commercial that is nifty.  


It is why I refuse to read Mashable. It's like reading Fox News but for Social Media. It is why I don't read Chris Brogan, Brian Solis as much as they are nice guys. Their views help small businesses. But not Big Business move their stock price. It's why I laugh at Klout and the Edelman Trust Barometer. Big Picture people! What will move stock prices of a Fortune 2000 Company? Not a Facebook page. Not Fan Engagement on Twitter. Not identifying key online influencers.

Read Bob's Pepsi Posts. Also read his Febreeze Post. Because for Febreeze he is dead on. And his Pepsi's posts are not off mark, except for using Pepsi as a case study.

Social Media is not moving sales for big companies. But I will not be baited into saying it has no value. I have a Finance Degree. I put a value on EVERYTHING and everything has a value. Starbucks with 18 million Fans on Facebook, the value isn't 18 million fans. It's not even the number that they engage. The value is how many Fans because they engage with Starbucks on Facebook buy more Starbucks, or at least shift their purchasing to increase Starbucks market share of their total purchasing. And how many get friends, family etc to buy more Starbucks or increase Starbucks market share in their life So using this formula I bet it's safe to say Facebook has zero value to Starbucks at this time. Look at their page. They get about 200 to 400 people posting to their wall saying they love Starbucks. Divide even 1000 by 18,000,000. It comes out to almost zero. And we have no clue about sales.

Now let me look at Pepsi.

1] I have no idea their total Ad Budget for 2010. But safe to say $20mil for Pepsi Refresh or the Superbowl is less than 1% of spend. Why bash them for giving back to the community. Bob's taunt on this is almost saying Sales trumps doing good. And trust me. He is not that type! And I doubt Facebook Fans were the goal here vs having Communities look at Pepsi as a Do Gooder Company.

2] Pepsi has 19 Divisions that each bring in $1bil. So they are a much more complex company than Coca Cola.

3] Maybe their Creative Agency is doing poor work? Maybe Pepsi should put their Advertising Account under review that currently is with TWBA/Chiat/Day? This would be one place I would look hard. At their 'Traditional Marketing'. I see Pepsi Out of Home but don't watch much TV so not sure what the Commercials are like today. (Please note I like TWBA and it grieves me to write this)

4] Maybe Coke is discounting more at point of purchase. I got a TON of Coke Coupons Superbowl week at my store. Zero from Pepsi. For every person who will not substitute I bet 100 will. I don't care what surveys say. So if my Supermarket has Club Card Specials more often for Coke vs Pepsi then yes Coke will see a sales uptick.

5] Maybe Coke drinkers are less healthy and are more obese and willing to suck pure sugar into them diabetes be damned and all these years Pepsi drinkers were more likely to switch to water? Granted Diet Coke has done well.

6] Maybe the Media Buying Agency for Pepsi is sucking. Maybe they have been blowing it big time on the Ad Spend and wasting their money? I see Pepsi still everywhere Out of Home. This would be the second place I would look hard.

7] Maybe operationally Coke is doing better from Supply Chain Management to their Direct Sales group?

My point is this is a very complex situation and you can not point the finger to Social Media for the Pepsi situation. Point all you want at Social Media. Social Media deserves the scrutiny. But you can not simplify a very complex situation like this by blaming Social Media or Digital Strategies.

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