Pepsi Targets Online Influencers in China

With their Voice of a New Generation campaign, Pepsi demonstrates itself to be a strategic player and early leader in the social media space in China.

Some bloggers have been critical of the campaign’s offline logistics, others see a error in going after a small niche audience and the available metrics indicate relatively poor initial online performance compared to other examples. None-the-less, I think Pepsi is blazing an intentional trail that other companies looking to enter the Chinese social media scene should consider following.

Voice of a New Generation is an integrated real-world/broadcast/digital program focused on the “alternative” or “underground” music scene. Battle of the Bands events are held with contestants earning slots on a branded American Idolesque TV show, with buzz and voting taking place in the Web 2.0 space.

Alternative Bands Perform in China

Voice of a New Generation Performance

Pepsi’s effort follows the successful Mongolian Cow Yogurt Super Girl contest (seriously, that’s the name). Super Girl generated 400 million TV viewers a month who voted for their favorite performer by SMS. Other talent search shows have been quite popular on Chinese TV as well. While the TV tie-in is certainly interesting, it’s the social media aspect of this campaign that is most intriguing and the real subject of this post.

Online, Pepsi is smart to create a social media ecosystem with many complimentary platforms:

  • Tudou–video sharing
  • Baidu–forum
  • Sina–blog
  • Tiany–forum
  • QQ–game
  • Douban–social networking

SMS/Twitter is missing, which warrants further investigation, but note the somewhat unusual inclusion of gaming. We see the implementation of a holistic plan strongly positioned to drive interactivity with the intended audience.

Why then are the numbers so small, as littleredbook.cn points out? More importantly, why do I think that’s just fine where many bloggers see Pepsi having misstepped by targeting “underground/alternative” music artists and fans instead of going after more of a “pop” audience where the numbers would be larger?

Two reasons.

1. I think Pepsi is going after cultural INFLUENCERS, not the broadest cross-section of the population. In the Coke vs. Pepsi war, it is important to differentiate the brands from one another and Pepsi has clearly decided to be the edgier player. Picking up market share can best be done by having a different personality than the leader. Read Bharghava and also Ries & Trout who explain this type of strategy in detail.

Creating an edgy brand promise is something that requires association. It’s one thing for a company to say they’re about individuality and fun, but another for those that actually live that individuality and fun lifestyle to provide the validation. So what we see here is Pepsi making a strategic choice to go after the small group of influencers. There is adequate literature on the power of influencers in the U.S. market, but I reference a Power of Influence blog post as it pointed me to a new international study (in which influencers are called “Global Multipliers”) for it has one particularly important finding:

“Among Global Multipliers in all markets, those in China are the most likely to use the Internet to share their recommendations.”

Pepsi is dead on target with the Voice of a New Generation strategy. Going after influencers that have their own social media connections on other platforms and in other communities can have great impact in the market. The metrics on the Pepsi sponsored pages alone are simply not painting the correct picture.

2. Pepsi is in the Chinese social media game for the long haul. Compared to Coca-Cola’s 2008 revenues which predominantly took place overseas (75%),  only 48% of Pepsi’s 2008 revenues were generated outside the U.S. That’s clearly got to change for Pepsi to stay competitive. As Fortune magazine points out, PepsiCo’s Chairman and CEO Indra Nooyi (formerly of Boston Consulting Group) is a strategist well aware that “the U.S. marketplace [is] in slow-growth mode even in the best of times, [and] the biggest opportunities are overseas.” Reuters reports that given the enormous potential of the Chinese market, Pepsi is investing $1 billion in China over the next four years. So looking at short-term ROI (using the regular social media measurements) of the Voice of a New Generation campaign is meaningless. The game Pepsi is playing is for billions, not the cost of a one-off campaign.

Whether the underground music approach to tapping the emerging youth consumer segment of China works or not, Pepsi is on the right track looking to engage Global Multipliers in the Chinese social media scene. They should continue to identify these segments and engage them with other creative campaigns.

— “Pepsi Targets Online Influencers in China” posted by Gregg Rapaport

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4 Responses to Pepsi Targets Online Influencers in China

  1. Your analysis of the Pepsi campaign and strategy offers exactly what a strong blog post should do … take something that is out there and critiqued by many and offer a nuanced and different view of it that demonstrates your own thinking and take on the campaign. The end result is a post that gives us a fresh look at a marketing effort and offers real lessons that other brands could use on targeting influencers instead of the mainstream to connect with Chinese consumers. (4)

  2. Michole Brown says:

    Yet another fantastic post my friend:) can you shoot me your email address when you have a second? –send it to my work account: michole.y.brown@bankofamerica.com.
    Wrote the introduction note to Donna for you last night, then realized I had no idea what your email was! Thanks and take care.

  3. Misha Hutchison says:

    I think the idea of Pepsi taking a stand against the status quo and really defining its brand personality though risky (in terms of ROI), says a lot about what they truly value…brand personality and making sure its marketing strategies gain the attention of tomorrow’s (next) generation (long-term), as opposed to focusing on what’s hip today.

  4. Heather Lovett says:

    I really like your analysis on Pepsi’s target audience. I agree with you, I think with Pepsi choosing to focus on the influencers, the company is indirectly targeting the masses. I don’t think it’s necessary to target every citizen, but I do think a company should be strategic in how their messaging can reach the largest number of people.

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