PepsiCo asks start-ups to transform marketing

07 June 2010

NEW YORK: PepsiCo, the food and beverage giant, is holding a new competition aiming to identify ten start-ups in the media, communications and technology sectors that can move its marketing to the "next level".

The company  has joined forces with venture capitalists Highland Capital Partners and Mashable, a web publication focused on social media, to run this "unprecedented" initiative, which is called PepsiCo10.

It is asking entrepreneurs to submit ideas relevant to four areas, in the form of social media, mobile marketing, digital video or gaming and location-based or retail experiential marketing.

The criteria used to evaluate proposals will include their potential to "impact brands" and whether they match PepsiCo's  corporate goals, like improving health and wellness and becoming more sustainable.

The participating firms will have to pass through two rounds of assessment, with 20 members of this group then attending a two-day event at PepsiCo's headquarters in Purchase, New York.

Successful applicants will then be paired up with "industry mentors" like OMD Ignition Factory, TracyLocke, dmg::events and Weber Shandwick to work on a "pilot project" for one of PepsiCo's brands.

Bonin Bough, PepsiCo's director of digital and social media, said the programme would help it leverage "some of the most original emerging technologies and … develop innovative marketing ideas."

A recent study by Gartner, the research company, suggested organisations like Procter & Gamble and IBM were generating considerable benefits from expanding their web of corporate partners in a range of sectors.

Seth Kaufman, director of media strategy and investment for PepsiCo North America beverages, was optimistic this approach would also deliver impressive results for the owner of Gatorade and Lay's.

"We are championing outside innovation … to push our marketing and communications expertise to new levels, including how to leverage innovative tools to better connect with and engage our consumers," he said.

One example of PepsiCo's previous activity in this area was becoming the first firm outside of the retail category to ally with Foursquare, which operates mobile loyalty services for a variety of advertisers.

Whenever one of Foursquare's 1.4 million users "checks in" at a relevant retail location or restaurant selling Pepsi's products, they earn points that can be redeemed against its drinks and snacks or donated to charity.

Alongside strengthening its bond with consumers, this platform gives PepsiCo access to a wide range of demographic data, which will in turn inform the firm's communications planning.

"Being able to drive foot traffic into our restaurant partners and our retail partners is a huge opportunity, because that's where our product is sold," said Bough. 

"If you check into work, then you leave work, you check into a bank and then you check into a store, that's a behavior that, in aggregate, we might use to transform the way we market to you in the offline world."

PepsiCo has also recently announced tie-ups with Brand Affinity, an endorsement marketing firm, and, a third-party platform that helps brand owners make an impression on Twitter.

Data sourced from PepsiCo, Foursquare, New York Times; additional content by Warc staff