Pepsi's Kaufman Talks About The PepsiCo10

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PepsiCo this summer tapped 10 startup companies to be part of a new incubator program called PepsiCo10. Soon, those partnerships will start bearing fruit with pilot programs for PepsiCo's range of beverage and CPG brands. The program is designed as a new conduit for digital R&D within PepsiCo.

The 10 firms in four "buckets" (place-based and retail experiential, mobile marketing, social and digital marketing, and digital games) run the gamut from mobile coupons to firms that are developing gaming platforms for consumers at retail locations, and social networking platforms that bring consumers together around common interests, such as music, TV and sports.

Overseeing pilot programs are global venture firm Highland Capital Partners; social-media publication Mashable; OMD Ignition Factory; TracyLocke; and Weber Shandwick. As well as some bright lights at Pepsi. Marketing Daily spoke with Seth Kaufman, director of media strategy and investment for PepsiCo North America Beverages.

Q: As part of this program you started with around 500 firms and got down to 10. That seems like a metaphor for the mind-boggling array of media platforms and tools out there for doing different new-media campaigns. How do you decide when to say "yes"?

A: You have to acknowledge that you are not going to have it all figured out and understand the platforms. Once you realize that, you focus on what you can see. What are some emerging platforms? The other piece is flexibility and agility to react in real-time to change. Our approach is to partner in different ways as the landscape changes.

Structurally, we have also changed to do that better. We have consumer engagement groups in beverage marketing, for instance, that stand outside of the brand team. Within the media budget we have a bucket of money carved out that was for innovation and technology. You have to see around the corner, so much of this -- doing it right and connecting with consumers -- knows what's next.

Q: Why take the time and effort to cultivate untested companies in the first place?

A: This is a very different approach, bringing young entrepreneurs and partnering with them to help them create a sustainable business model. It's about getting involved in innovation, not just putting our name on something. In general, our approach is finding ways of adding value to consumer experience rather than just develop advertising models. We are trying to add value. We are also trying to inspire new thinking and innovation. So I think it works not only to cultivate great platforms but also to find new ways to connect consumers.

Q: How did you winnow down the number of competing firms?

A: They were chosen on a few criteria. One was talent, and to be quite frank when we had a great two-day summit where twenty finalists were able to present to the whole organization, you could tell who the leading thinkers were. Second was the platform or technology that we felt fulfilled or solved a gap in the marketplace. Third was something we felt we could be commercialized quickly, "shovel ready," so to speak.

If you think about it, we in the ad industry often have a tendency to talk a lot about what's changing and not do a lot about it. We didn't want to just talk about needing to partner with brand new startups. We wanted to choose ones where could get pilot programs fairly quickly. Ultimately they turn from pilot programs to part of everyday media programs. By then we can tell if they add value.

The vast differences between the final ten illustrates how we are thinking about this. Miso (a social platform that allows users to "check-in" to their favorite television shows to earn points and unlock virtual badges, share what they are watching and see what friends are viewing, and engage with content throughout the course of a program) is basically a second-screen experience.

If you think about consumer multitasking, arguably one of the biggest challenges facing advertisers, Miso takes the TV experience, puts it on a digital platform to make it social in a way that actually takes advantage of multitasking. There is a great opportunity there to become part of the equation when consumers engage in new content, and to add value to that multitasking experience.

On the other hand, a company like Tongal (online platform that combines crowd-sourcing and games to harvest content from a worldwide community of creative types for campaign concepts, tag­lines, slogans, pitches, commercials, music videos, etc.) is not about solving a media problem, but recognizing the fact that as the consumer market fragments we have to reach smaller groups of consumers, we have to have more and more messages relevant to them.

A company like AisleBuyer adds value to consumers when they are actively at retail. If I can find a way to engage them at the moment of truth, the power is enormous.

Q: Is this going to go beyond ten firms ultimately?

A: We are always obviously looking for new technology and emerging platforms. This is not a program that says 'We will only work with 10 firms.' It was a way to fast-track and put resources against that in a big way. We might do this every year or twice a year. PepsiCo10 is just a beginning.

Q: What have you gotten out of the process so far?

A: The two-day summit in and of itself was worth the effort. We brought in our whole marketing organization [from all consumer divisions], agency partners and experts in the field. We had those four buckets -- place-based, mobile, social and digital -- and for digital video, for instance, we brought in Blip TV to talk about how they had succeeded. So these competitive firms met leaders who had succeeded in the field. We just had great dialogue, learnings and questions.

Personally, I walked out inspired to think about the landscape differently.

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1 comment about "Pepsi's Kaufman Talks About The PepsiCo10 ".
  1. Ronnie Perchik from PromoAid, LLC , September 20, 2010 at 10:08 a.m.

    This is not meant to be a plug for PromoAid, but we have developed a service that provides the same type of insight for marketers, and their agencies, to not only the "new" media, but established media too. Plus we have layered on a technology based solution that aligns programs offered by individual media companies with our clients' marketing objectives.

    We salute PepsiCo for their initiative and our clients for recognizing the need to embrace, be aware and engage with new.....and exsisting media.