Pepsi's Super Bowl Exit Isn't a Windfall for the Web

Money won't shift to banner ads

By Owen Thomas
|  Friday, Dec 18, 2009  |  Updated 4:00 PM EDT
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Pepsi's Super Bowl Exit Isn't a Windfall for the Web

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Traditional Pepsi ads, like this 1991 one featuring Cindy Crawford, are so old media. What will replace them?

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Google, Yahoo, and other Bay Area Internet giants should be celebrating Pepsi's move to pull its Super Bowl ads, right?

Wrong.

The sugar-water purveyor has advertised in every Super Bowl for 23 years, and shelled out an estimated $33 million last year for ads during the game. But in 2010, when CBS is scheduled to air the famous football game, Pepsi will spend its money on the Internet instead.

That money is going not into conventional banner ads but into something called the Pepsi Refresh Project, where Internet users can suggest community projects for companies to fund. Visitors to Pepsi's website will vote on which projects get funding.

It's a cleverish idea which might burnish Pepsi's image far more than a forgettable TV spot.

But significantly, the money saved by skipping the Super Bowl would be going into building the site and funding projects.

Pepsi's move speaks to the challenges faced by conventional media moving online: Advertisers increasingly can spend money online to reach consumers directly, rather than having their messages channeled through a publisher's website.

Pepsi will likely spend some money getting the word out about its website. But the do-gooders seeking funding for their projects will also likely push friends to vote on the website through social networking.

The next generation of Silicon Valley's Internet startups, like Facebook and Twitter, may facilitate some of that online word-of-mouth activity. But those companies have yet to figure out cash-spewing business models like the media businesses of old.

It may be a far better use of Pepsi's marketing dollars to skip the Super Bowl and build its own website. But it shows how the Internet doesn't just threaten traditional media.

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