Commentary

Pepsi's Refresh Project: Many Benefits, A Few Potential Pitfalls

Andrew Katz

PepsiCo introduced the Pepsi Refresh Project to a large audience during the Super Bowl. The yearlong project, whose mission is to fund entrepreneurial projects with "a positive impact," encourages fans to submit ideas -- as well as vote online to decide who will be monthly winners of multiple grants ranging from $5K to $250K apiece.

Consumer products goods companies don't nurture products by mentoring entrepreneurs, but instead seek to add fans and loyal followers -- a strategy that hearkens back to traditional technology companies like Google, Microsoft and Intel.

Some believe Pepsi's Refresh project has shifted the conversation between marketers and consumers from an adversarial relationship to a partnership. Yet Andrew Katz, senior manager for Pepsi-Cola Marketing, knows the company will experience bumps along the way. It's okay, he say, because that's the new world of marketing. He says the company pays a lot of attention to conversation. "Sometimes we just listen; sometimes we interject," he says, admitting there will never be as many winners as losers vying for grants.

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So what happens when the voices of those who do not win are louder than those who did? Perhaps some publicly express disappointment or think the project is a hoax. Moving from a broadcast to an interactive medium means companies have less control.

Although she thinks Project Refresh is a terrific campaign, Janis Forman, director of management communications, adjunct professor of management at UCLA Anderson School of Management, also sees the potential for problems. "Losers can become as vocal as winners. They have the same megaphone," she says. "You want to mitigate the potential for damage" by engaging in one-on-one conversations through Facebook Fan pages, Twitter and other social sites.

For those who don't win, just being a part of Pepsi Refresh gives them an "attention grant" -- a platform to reach a lot of people who have never heard of them before, Katz says. Pepsi has also been supporting "non winners" by reaching out to provide them with other sources of funding and resources for their projects.

Katz acknowledges that in a campaign of this size, some people will always be unhappy, though the overwhelming majority consider the project to have a positive influence on lives.

Using no broadcast media to publicize the contest in December, Pepsi closed the submission period for ideas in 72 hours. Then the company added a little media to the mix in February and closed submissions within 24 hours. By March, as the project became more well-known, Pepsi closed submissions in less than 12 hours. There have been millions of votes, more than a billion media impressions and hundreds of thousands of new Facebook Fans.

Kates says people can search for projects on the site. The journey starts when the money gets awarded. What really counts is the impact on community that these projects have on the world.

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