PepsiCo adapts TV model

15 November 2011

NEW YORK: PepsiCo, the food and beverage group, will increasingly use television ads as a "trailer" for its activity across digital media, reflecting the shift underway in popular habits.

Writing in the Harvard Business Review, Shiv Singh, PepsiCo Beverages' global head of digital, argued: "The TV spot has become the trailer for something bigger, broader and more interactive."

"Fewer and fewer advertisers will start their strategic marketing planning with a television advertisement in mind. Instead, they'll step back and begin with an engagement strategy that gets operationalised through a series of creative ideas that then get routed through different channels."

Singh suggested 60% of the US TV audience often look at a mobile phone when watching linear broadcast content and 33% do the same with a laptop, meaning TV spots occupy a new position.

"Their role isn't going to be about building brand recall, favourability and awareness in that moment alone," said Singh. "They will be trailers into deeper branded digital experiences."

"As marketers run television advertising, they need to be ready for the real-time response and the real-time marketing opportunities for deeper digital engagement."

The integration between these mediums has been shown by Pepsi Sound Off, an internet platform allowing viewers of the X Factor, sponsored by the firm's eponymous cola, to share their opinions.

More broadly, Singh predicted media planning may be transformed as marketers acquire greater knowledge of the online buzz surrounding ads, and the programmes of interest to customers, thus helping prove return on investment.

Indeed, Gross Rating Points (GRPs), measuring the reach and frequency of shows, could be replaced by GRPEs, with the "E" standing for "engagement", or "how social a particular TV show is".

"You can bet that information will heavily influence planning decisions in the future," said Singh. "The value we put on an advertisement will change as we seek to account for engagement metrics in the pricing."

Location-based "digital experiences" will be equally vital. Pepsi has previously run TV ads promoting a tie-up with Foursquare, the mobile check-in service, offering exclusive content when people visited sites like beaches and amusement parks.

"Location-aware technologies will force a greater degree of engagement on a format that had historically been passive, impersonal and certainly without any extensions," said Singh. "These will matter as they can track the user all the way to the store shelf."

Data sourced from Harvard Business Review; additional content by Warc staff