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The Secret Ingredient: Digital Media

So, in case you’re new to this blog, digital marketing is kind of a big deal around here. We’re always hungry for new ways to justify it – evidence that the traditional methods of marketing just aren’t where it’s at anymore. And it’s easy to rattle off statistics and arguments and logic and attempt to convince you that things are changing.

But sometimes, actions just speak louder than words. You have, no doubt, heard about Pepsi. The company has made waves before with its social media marketing. Some of you out there might have read the blog post concerning the Dewmocracy movement, an attempt by Pepsi to crowd-source the development of its new flavor of Mountain Dew.

If that’s not a big enough sign of their investment, consider also that they’ve decided not to do a Super Bowl ad this year. That’s a huge sign of their faith in digital marketing to do the job of engaging with consumers.

And now they’re doing something new. The company is teaming up with its 57 local bottlers to test the power of online advertising.

It’s a good idea, if you think about it. The current demographic that is coming into its buying power is marked by cynicism and doubt. Buying into a large company line that isn’t tailored to what they care about isn’t going to get anything out of them. So, rather than waste its money there, Pepsi is going to turn advertising over to the local bottlers instead. These local companies, in turn, will have the license to tailor the message for their own markets.

So Pepsi is going to be working with the company PointRoll, an OMD company that will help to run local campaigns across 150 designated market areas. Ads will be placed in portals such as Google and Yahoo. At the heart of PointRoll’s effort is ShopLocal. This service allows retailers to run local ads and offers. The system uses a database interface to store offers, localize them, and then deliver them using the PointRoll ad delivery platform.

How do the results look? So far, the company is hesitant to say. Pepsi wants to wait until the fourth quarter to reveal any findings. Initial reports indicate that the company is pleased with the decision to shift its resources toward digital.

The portals that were chosen – Google, Yahoo, AOL, etc. – were done so because of their ability to deliver ads on the level of the desired markets, meaning that they were customizable to a local area. Additionally, there’s going to be more than just Pepsi itself. The company carries a wide range of products, so you can expect to see Mountain Dew ads, SoBe, Sierra Mist, etc.

As for the price? Pepsi is remaining close-lipped on the subject, except to say that it is small in relation to the costs of traditional media. Since it reported spending $360 million in 2009, it ought to be interesting to see what fraction can generate similar results.

The bottom line? Pepsi is treating digital space like a priority. You would be wise to consider it similarly.

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