Pepsi Makes the Best of a Super Bowl-Free Sunday
Talk about making a silk purse out of a sow’s ear. PepsiCo has managed to make a win out of not sponsoring the biggest advertising event of the year.
See the story here, by Jennifer Preston of the NYT: Pepsi Bets on Local Grants, Not the Super Bowl
What’s better than reaching more than 100 million viewers during last year’s Super Bowl? For Pepsi, it could be 6,000 football fans during a high school game on Friday night in central Texas. Or a group of parents who wanted a new playground in their Las Vegas neighborhood.
That is the bet that PepsiCo made when it walked away from spending $20 million on television spots for Pepsi during last year’s Super Bowl and plowed the money into a monthly online contest for people to submit their ideas and compete for votes to win grants….
This is the first time in 23 years that Pepsi isn’t a sponsor of the Super Bowl. How did this happen? Who knows. Maybe the price-tag got too rich for them. Maybe they got outbid. (Though it’s worth noting that PepsiCo won’t be entirely absent from the Super Bowl: the game will feature ads for two of the company’s other brands, Pepsi Max and Doritos.) At any rate, Pepsi says it’s just a new strategy. Interestingly, they say — despite the fact that this new strategy involves giving millions of dollars to good causes — it’s not a philanthropic strategy:
“This was not a corporate philanthropy effort,” said Shiv Singh, head of digital for PepsiCo Beverages America. “This was using brand dollars with the belief that when you use these brand dollars to have consumers share ideas to change the world, the consumers will win, the brand will win, and the community will win.
It’s an interesting move. For one thing, it brings together cause-based marketing and social media on a supersized scale. And to me, whatever the motivation for the move, it’s a true-and-justified instance of corporate social responsibility. It’s not ethically obligatory: I don’t think there’s anything wrong with doing things the old way. It’s not unethical to spend $20 million-plus on commercials for the Super Bowl, like they did last year. And it’s not obligatory to support dozens or hundreds of local causes. So think of it this way: PepsiCo has $20 million to spend on building its brand. It had to choose a strategy, a choice regarding how to spend that money. They could give it to the NFL, or they could give it to a bunch of worthy charities. If they can achieve their objectives (and hence fulfill obligations to shareholders) while at the same time doing some social good, that’s a good example of CSR.
As the company says, though, it’s a gamble. But as gambles go, they’re sure making the best of it. PepsiCo is turning not sponsoring the Super Bowl into a straight-up victory, rather than a defeat. And notice also that, with the right media coverage, Pepsi still gets its name associated with the Super Bowl.
The Business Ethics Blog 
Quite remarkable and yet refreshing that the spokesperson for Pepsico came right out and said “This was not a corporate philanthropy effort,”
Generally speaking, many for-profit corporations like to beat the drum when they hand out money for such public and community minded programs, so is Pepsico admitting their real intentions in advance in order to avoid any possible negative criticism? Who knows for sure, but I for one am surprised by Pepsico’s stance.
For John:
Are you implying that Pepsi is admitting that their “real intentions” are only to further their own good? Just to be clear, Pepsi’s stated intentions are that not only will the brand win but consumers and the community will win also. So Pepsi’s intentions are not exclusively about their profit and gain but also about the good of others. They are not admitting that their real intentions are to further their good in the guise of helping others – they claim to care about others as well.
For Chris:
Your argument is that Pepsi’s campaign is a good example of CSR. Do you mean to imply that CSR that does not benefit their company (e.g. maximizing return to shareholders) is a bad instance of CSR. Or is it less than ideal? If possible it would be useful to have an example of a bad or less ideal example of CSR.
Tom:
I think pure charity is less than ideal, in most cases, for all the standard reasons having to do with the lack of explicit authorization for managers to give away other people’s money. I generally don’t think corporations have an obligation to go out of their way to contribute, socially. But when you’ve got 2 ways of meeting the same objective, it seems reasonable to argue that you should choose the socially-constructive option.
Chris.
In response to Tom’s point, I called it as I saw it.
The New York Times article referred to in Chris MacDonald’s Blog posting had quoted the PepsiCo representative as follows:“This was not a corporate philanthropy effort,” said Shiv Singh, head of digital for PepsiCo Beverages America.
Having spoken the words found in the quote, I merely assumed Mr. Shiv Singh had intended the words he used to be given there ordinary dictionary meaning. In the so-called “digital” world we now live in, was that somehow wrong of me to do so? Am I missing something? Please elaborate.
After thinking about it I think you are right by pointing out that Pepsi’s stance is surprising. I guess what I was trying to say is that it shouldn’t be — it should be more common to hear businesses endorsing CSR done in a way that also is a win for them. Perhaps Pepsi’s stance is more sophisticated and we should give them credit for trusting people to get it. I’d like to think that their stance is simply more honest: they don’t have to pretend to be doing mere philanthropy but instead admit that they are doing good-for-all-concerned CSR. I think my reaction was more about my bias against those who believe that business or people never do anything that is not self-beneficial and proclaiming otherwise is a sham.
Was it not Pepsi that pulled out of having their products in school vending machines, thus leaving the likes of Coca-Cola with a nice dilema? More of the smae approach?