The hype surrounding social media might lead some marketing industry observers to believe that major brands are backing away from advertising on TV. In a well-publicized experiment, Pepsico pulled back from TV advertising, especially large events like the Super Bowl. Now that the firm has lost market share in the carbonated beverage market, it is planning to invest more in TV advertising. And Pepsico not the only company looking to connect with consumers through TV.
A report in the Los Angeles Times earlier this month noted that PepsiCo is ‘not happy’ about losing market share to competitor Coke. PepsiCo reportedly spent $20 million on an online campaign dubbed Pepsi Refresh Project. Meanwhile, Coke, which has been spending at least $30 million a year on American Idol, a popular TV show, has seen sales grow. After this unhappy experience, Pepsi has apparently decided so move back into TV advertising and to get face time with consumers who are likely to tune into Simon Cowell’s new talent show, the X Factor.
Other beverage companies see TV as a way to reach large audiences but they are using the medium in new ways. For example, Diageo PLC is looking to increase sales of its Guinness and Smirnoff brands. The company produced a reality show called Master of the Mix which was featured on Black Entertainment Television. In addition, the company is producing TV game shows in Africa that are sports-based. Writing for the Wall Street Journal, Paul Sonne says that while Diageo PLC is using more digital formats and live events to make the brand visible, it's clearly not ready to give up on TV.
The path taken by both Pepsi and Diageo PLC indicates that marketers must consider more than the online universe when they want to actively influence consumer purchases.[Sources: James, Meg. Pepsi hopes tapping a big gun will restore market share. LATimes.com. 17 Mar. 2011. Web. 30 Mar. 2011; Sonne, Paul. A Game, A Game show, A Guinness. Online.WSJ.com. 16 Mar. 2011. Web. 30 Mar. 2011]