Pepsi Max: Unbelievable

Source: IPA (UK), Silver, IPA Effectiveness Awards, 2016

Downloaded from WARC

This case study shows how Pepsi Max, a carbonated drinks brand, used a content led digital strategy
focusing on an existing product to build sales in the UK.

After years of heavy discounting and adapting big American TVCs to the British market, Pepsi
Max had lost relevance.
The campaign relied on the insight that Pepsi Max, a drink with no added sugars but all the
flavour of a cola, was the embodiment of the 'impossible made real'.
So the campaign delivered several hero films - that portrayed impossible situations come true,
including a celebrity magician hovering or an augmented-reality zombie attack outdoor display -
on YouTube, supported through social, digital, OOH, and POS ads.
The campaign recorded a total £54m in sales revenue and a Marketing ROI of £2.25 for every £1
spent.

Principal author: Tim Whirledge, AMV BBDO

Contributing author: Hannah Stockton, OMD UK

Summary
After years of heavy discounting and adapting big American TVCs, in 2012 Pepsi Max had lost relevance to the
primary consumer (18 – 34s)1

Those still buying cola were buying Coke (a brand with 4 times the marketing budget, bigger distribution, and a
consistent brand message) as the default choice.

This is a story about Pepsi's transformational journey over the past three years to better engage with Millennials
to surpass growth targets in a static cola market.

This journey began with the brand boldly redirecting marketing spend away from the traditional TV advertising
model to a digital content led approach.
We'll tell the story of our creative and media investment decisions that encouraged Millennials to choose Pepsi
MAX with results along the way including becoming the most subscribed FMCG brand on YouTube, a Marketing
ROI of £2.25 in 2014, (up +52% on our pre content strategy MROI in 2012). And over the last three years help
defy a flat and mature category by growing Pepsi Max revenue incrementally by an additional £54m.

Background
Cast your mind back to the 80s and 90s. A time when cola ruled the UK carbonated soft drinks market, and if
someone asked you whether you wanted a drink, your biggest decision was Coke or Pepsi.

It was into this context in 1993 that Pepsi MAX was launched; a no sugar cola that tasted like a regular cola.
Unlike other sugarless or 'diet' drinks, Max was aimed at a younger, male audience.

Campaigns for Max were created in the US and adapted by the UK market. They tended to be big American
numbers often featuring big names. Then in 2005, ahead of the curve PepsiCo made the bold decision to only
advertise our no sugar variants meaning we only ran Pepsi Max campaigns in the UK.

Fig 1: Example of globally created ads using celebrities2

And over the years there were a lot of different campaigns.

Fig 2: Example of tag lines used from launch to 20123

But the category wasn't growing4. New entrants were flooding the market encouraging consumers to switch from
cola to more tailored propositions and exciting brand stories.
Fig 3: Example of range of soft drinks available in the UK

After a decade of Pepsi Max global advertising, the brand was failing to be heard with only 5% of our audience
understanding that Pepsi Max offered something different to the leading cola competitor, it had also failed to
communicate Max's point of difference; all the taste of a regular cola, but none of the sugar5.

A triple whammy of a declining market, a weakened brand, and a strong key competitor meant that drastic action
was needed.

Objectives and KPIs

Our primary objective was to drive sales.

In order to do so, we believed that meeting the following KPIs was critical:

Improving brand equity scores amongst 18-34s

Communicating in an efficient manner (driving ROI)
Driving engagement amongst our key audience

We needed to make the brand relevant again by being the cola that understood the need to entertain our
audience, not just sell to our audience.

"Insanity: Doing the same thing over and over again and expecting different results" Albert Einstein

Traditionally, brands looking to create fame and affinity have turned to broadcast channels such as TV.

However, doing this effectively relies on a significant budget and in most cases an excessive share of voice vs.
the competition6.

But those familiar with the media behaviour of 18 – 34s in the UK would point out that it is also not necessarily a
fight that needed to be won.

We knew we had to think differently.

This audience were spending 50% more time watching online video than TV7, with YouTube the most popular
site8.

Whilst lots of brands had successfully used YouTube pages to promote individual videos, very few had
successfully operated as channels (according to Unruly, brands represent less than 2% of the Top 5,000
channels on YouTube9).

In fact, there were no documented examples of a brand putting a YouTube channel at the heart of their strategy,
using it to improve brand measures and ultimately track through to sales performance.

This was where we saw the opportunity.

Furthermore, OMD calculated that with clever digital targeting we could be 55% more efficient at targeting the
18-34 year old demographic (in terms of reach and frequency) compared to TV10.

It meant that for the first time, a local Pepsi market would break the convention of using globally adapted TV
campaigns. If successful, it would reap all the rewards of taking this bold step. If a failure, all the risk.

THE 'C' WORD

The heat was on.

We just had to create YouTube content that 18 – 34 year olds loved and that ultimately sold some product.

Content? The word that describes everything and nothing?

That sold? Not just delivered views or got a few likes?

To 18 – 34s? The most notoriously difficult audience to market to, where the rules of engagement had changed
so much and continued to change on what seemed like a daily basis?!?

LOL.

We needed a bit of help.

We organised a 'speed dating' research session where friendship pairs could have a relaxed conversation and
share content with pairs from both agency and client organisations.

Fig 5: Photographs from our speed dating research session

We learnt that as a generation hit hard by austerity, they were rebelling against it. They craved excitement,
novelty and fun; experiences made their lives more interesting, and brought their tight knit friendship groups
even closer together.

The same insight applied to content. They sought out mind blowing or really funny content; content that
delivered personal enjoyment, and, when shared, both made them look cool, and acted as social currency.

The Breakthrough
Pepsi Max's product truth is an apparent paradox. It contains no sugar, but tastes every bit as good as a full
throttle cola.

Until now, we had never overtly acknowledged the paradoxical nature of the product story. And so, ironically,
consumers didn't believe our story. If something sounds too good to be true, it generally is too good to be true.
The strength of our product story was our undoing.

Realising this fact whilst talking to our cynical Millennials led to a breakthrough moment.

Fig 6: The creative strategy

In order to drive credibility and understanding, we needed to create content that captured their imaginations so
much they'd want to share it with their friends but confronted perceptions that our product story seems
somewhat implausible.

So our strategy was to create content that was as incredible as our cola: to make the seemingly impossible
possible.

Act One: Magician Impossible

Our first foray into creating incredible content was in June 2013. We enlisted the help of leading TV personality
and Magician 'Dynamo' to show how Pepsi Max, an amazing cola taste without any sugar, was a brand that
made the impossible possible. The films revealed Dynamo performing incredible, seemingly impossible magic
tricks. Our hero piece saw him seemingly levitate up to the side of a London double decker bus and float
alongside the bus around the streets of London much to the astonishment of the onlooking crowd.

Fig 6: 2013 Dynamo campaign

The campaign paved the way for an even more committed content platform that didn't rely on established
celebrities. A presence that would encourage consumers to seek out, not just Dynamo content but Pepsi
content.

Act Two: Unbelievable

So in 2014, the 'Unbelievable' Pepsi Max YouTube channel was born. A commitment from our own marketing
team and agency partners to re-engineer how we would deliver content and build our own audience base, not
simply borrow from elsewhere.

We organised and commissioned our content via the YouTube 'Hub, Hero, Hygiene' model.

Fig 7: Hero, hub, hygiene content model

Our first hero film saw stuntman Damien Walters pushing his gymnastic skills to a new level by attempting the
world's first human loop the loop. Hero content was designed to generate buzz and PR around the brand to
extend the reach and engagement with the brand and channel beyond paid advertising. The nature of the
content was therefore paramount

Fig 8: Stills from 'Loop the Loop' hero film

The reaction we got was just what we were hoping for.

Fig 9: Examples of YouTube comments on the 'Loop the Loop' film

Earning us plenty of attention via mainstream news outlets too

Fig 9.1: Examples of press coverage of 'Loop the Loop' film

In another unbelievable piece of programming, we made London commuters jump with alien invasions, roaming
tigers and giant tentacles emerging from behind an innocuous Pepsi MAX bus shelter poster thanks to
augmented reality technology.

Fig 9.2: Stills from 'Bus Shelter' hero film

The work again was picked up by a myriad of media.

Fig 9.3: Examples of press coverage of 'Bus Shelter' film

Throughout the year, we released more hero films including the following:
Fig 10: Summary of hero films

The strength of our Hero content was matched by a strong content distribution model to drive maximum paid and
earned views as cost effectively as possible. Understanding that content by its nature is short lived with 65%11
of all content being viewed within the first week it is available, we developed a Discover/Reach/Fame model. It
enabled us to hit 75% of all Millennials12 within 4 weeks of each Hero content piece being live:

Fig 10.1: The Discover/Reach/Fame distribution model

Alongside our hero content we created regularly scheduled hub content (using YouTube vloggers) to ensure
ongoing engagement with our audience. Their involvement also helped us seed our content via credible and
authentic channels whilst further embedding an FMCG brand into the fabric of the YouTube content community
as they featured on our channel and we featured on theirs.

Fig 11: Summary of hub films

Our content strategy was also used in digital outdoor (integrating the public's unbelievable Vines in a media
first), POS, and 6-sheet posters and bus sides.

Fig 12: Examples of digital outdoor, 6 sheet poster, bus side and banner ad

Act Three: Genius

In 2015, the most recent iteration of our content strategy has seen us continue the 'Hub, Hero, Hygene' model.
As part of this continued commitment to content publishing, we have created a new series of 'Genius' films
focusing on leveraging culturally significant moments in our consumer's lives.
For example to celebrate the anniversary of the film classic Back To The Future, we partnered with the franchise
to create a genius experience for Uber customers. Our Oomph-o-meter stunt saw us hi-jack the NFL's visit to
London whilst our summer festival Friend Finder drone reunited lost friends at the UK's largest festivals.

Fig 13: A sample of our 2015 Genius content

Results
Our KPIs at the beginning of this paper were:

1. Drive sales
2. Improving brand equity scores amongst 18-34s
3. Communicating in an efficient manner (driving ROI)
4. Driving engagement amongst our key audience

So we have split our results to reflect against how we met these objectives:

1/ Sales

In the last three years we have made big gains in our cola market share, the gains increasing year on
year.

In 2013, Pepsi TradeMark (all Pepsi cola UK brands – Regular, diet and Max) maintained it's value share of
the Cola market aided by Pepsi Max brand growing by 0.4%13.
In 2014, Pepsi TradeMark increased its share of the cola market by +2.1% with Pepsi Max increasing
share +1.2%14.
In 2015, Pepsi Trademark increased share of the cola market by +3.8%, Pepsi Max driving this growth by
growing +2.4%15
This performance outperforms the cola category that was down -0.5%16 in volume and up only 3.1%17 in
value over the same period (2013-15)

In the past three years we have seen the largest value sales and volume growth of all the cola brands.

In 2013, Pepsi TM drove an increase of £9m of additional sales value into a flat growth cola category
across all pack formats. In 2014, £32m and in 2015 £24m with volume up across the same period in a
similarly flat market.
 The most encouraging part of our sales growth story is the growing impact and contribution to this growth
by Pepsi Max – contributing an incremental £10m in 2013, £19m in 2014 to £25m in 2015 – a total of
£54million.

One way to illustrate the difference in sales performance between ourselves and the cola category, both volume
and value is to index our sales performance against pre content marketing sales. Here you can see how our
sales performance begins to diverge in August 2013 – a few weeks after our first Dynamo content campaign
signalling the start in a step change of sales performance and media strategy.

Fig 14: Sales volumes and value indexed against pre content strategy sales

Fig 15 shows over the same period, Pepsi Max as the lead brand within the portfolio that has increased its
contribution to both value and volume sales whilst diet and regular Pepsi stay relatively stable.

Fig 15: Breakdown growing contribution of Pepsi Max to Pepsi growth over time
And although difficult to put a specific value against, the strategy has enabled PepsiCo to take a new and
innovative story into sales meetings too.

Fig 16: PepsiCo sales literature

2/ Improving brand equity scores

Max saw improvements that outperformed the category across nearly all of its equity measures YOY with
increases even more pronounced amongst Millennials. Fig 20 shows gains in BPS (Brand Power Score)
amongst millennials increasing vs 2012 (pre content year) – by about 2% in 2013 and 2015 although it dropped
back to 2012 levels in 2014.

Fig 17: Increasing brand equity scores amongst Millennials

This could be further validated in independent brand impact studies (completed by our media partners) looking
at how our content was engaging our target audience. For example, our viral hit 'Loop the loop film' performed
better than 73% of ads18 on the AOL Network on emotional appeal. Meanwhile Fig 18 shows the impact of our
Time Tunnel and Reaction films on purchase intent (a notoriously difficult metric to shift in FMCG categories)
amongst millennials. The Reaction film was 4% above the FMCG norm for driving purchase intent whilst our
Time Tunnel film was 7% above.

Fig 18: Time Tunnel & Reaction content films impact on Purchase Intent19

Fig 19 shows our steady increase in our brand power score coupled with our leading cola competitor's decline
has helped us close the equity gap by 2pts or 10% amongst our targeted millennials.

Fig 19: Increasing brand equity scores amongst Millennials

If we drill into the no sugar offerings of the cola category in Fig 20, amongst Millennials, we see that Pepsi Max's
improved preference scores vs the rest of the zero sugar cola market coincided with our switch to content in
2013 enabling us to become the choice for this generation amongst no sugar cola variants by 2015. The chart
on the right in Fig 20 exposes how the MAX improvement also tallies favourably against the wider no or low
sugar carbonated soft drink market too.

Fig 20: Brand Preference vs zero sugar category indexed against pre content strategy 2012

And the good news was that these shifts in brand equities were having an impact on our buyer profile too. Fig 21
shows the biggest proportion of new Pepsi Max buyers has come from the demographic we were actively
targeting in our communications – millennials.

Fig 21: Demographic profile of Pepsi Max drinkers20

This wasn't a category trend either. Fig 22 shows that other leading colas were struggling to recruit the same
demographic with their profile of drinker skewing older than ours.

Fig 22: Demographic profile of cola buyers21

Fig 23 shows that of these new PepsiMAX drinkers, they were switching from our leading cola competitor to
MAX.

Fig 23: Max switchers by brand22

3/ Communicating in an efficient manner

As mentioned previously our media strategy since 2012 has increasingly seen us invest in digital as our primary
channel in order to reach our audience more efficiently. Fig 23.1 shows the growing significance of digital as
part of our media mix. In 2013 51% of Pepsi MAX total media spend was on TV versus 15% on Digital. In 2015
this had flipped with 45% of media spend on Digital and only 12% on TV.

Fig 23.1: Change in media channel spend over time23

And of our digital creative, we know that it was our online video content that was most effective in driving brand
and message recall as well as likeability.

Fig 24: Impact of different digital formats on brand24

A 2014 Econometrics dip25 also revealed the impact our content strategy was having year on year. A focus in
2014 on our content work saw a 45% increase on the previous year's MROI to £2.25 and a 52% increase on our
pre-content campaigns in 2012.

Fig 25: Marketing ROI 2012-2014

4/ Driving engagement amongst our key audience

a) YouTube

We delivered extremely strong engagement across our digitial activity

Pepsi the publisher:

The Pepsi MAX YouTube channel is now the most watched in FMCG in the UK (up from 100th at the start
of the year) and the 2nd most watched branded channel overall reaching up to 5 million views per video
 The Pepsi MAX YouTube channel has over 110,000 subscribers and accrued over 50 million UK views (7x
more than our leading cola competitor)
Our films have an average retention rate of 70% vs. Google norms of 60% (with hero films achieving an
even higher rate e.g. 81% for 'Unbelievable bus shelter' and 78% for 'Unbelievable football')26
Our content has been hugely engaging, for example our hero films – Loop the loop and Bus Shelter –
achieved Facebook engagement scores of 15% and 7.8% respectively (vs. the category's average rate of
1-2%)27
High earned to paid ratio for hero films – for example 70% Earned views for Loop the loop28.
The Pepsi Max channel is has gone from pioneer to pantheon as an exemplar to other brands looking to
build their content offering29

b) PR

As has been alluded to in earlier sections of this paper, the content drove significant earned attention
to extend the campaigns reach.

Our activity delivered over 239 pieces of coverage across traditional, online and social media. Editorial news
and feature articles contributed to a combined reach of 66,418,48430.

Eliminating Other Factors

Could our sales growth be attributed to any reductions in price to undercut the competition?

Price shows that Pepsi was a little bit cheaper than the category average during the second half of 2013 and
again in spring 2014 although this was because the category average price increased rather than Pepsi
reducing our price (note the index staying very close to 100 for Pepsi) but price stays pretty much on a par from
mid-2014 onwards.

Fig 26: Pepsi v category average price change excluding Pepsi

Fig 27 shows the Pepsi Max average price as a % of the category excluding Pepsi demonstrating although we
have been the less expensive cola on average, there has been no marked change and therefore cannot assume
it was a change in pricing strategy that led to the sustained sales growth.

Fig 27: Pepsi Max price % of cola category price excluding Pepsi
Did we benefit from distribution gains?

Pepsi operates in a mature market with near ubiquitous availability of the product. Looking at ACV distribution
across the Pepsi portfolio, we can see the breadth of distribution has remained broadly constant over the last
five years including the campaign period for all variants.

Fig 28: Pepsi Max ACV distribution % over time

Did we outspend the competition?

This is a story of a brand not reverting to simply throwing media money at an objective, expecting to be able to
outshout the competition. Whilst over the period of content marketing (June 2013- December 2015), our actual
spend decreased meaning our share of voice did not increase. Given that share of voice is known to be a much
more accurate predictor of success than absolute spend, we can discount this as a factor31.

Fig 29: Change in media spend annually vs leading cola competitor

Did we benefit from weak competition?

No. Our campaign created competitive disorder, rather than benefiting from it. As you can see from the media
spend previously noted above, the leading cola competitor reacted by spending more over the period.

Did the category simply become more popular?

We've accounted for share data in our analysis showing growth in a largely flat market.

Did we benefit from increasing our in-store promotional activity

In terms of in-store promotions, the % of volume driven by promotions as measured in our 2014 Econometric
models revealed a stable contribution of:

2010 = (53%)
2012 = (42%)
2013 = (37%)
2014 = (41%)

We have included 2010 and 2012 volumes to show pre-content level % contribution of in-store promotions.
Unfortunately 2011 and post 2014 data was unavailable.

Did we benefit from a change in packaging?

No, PepsiMAX packaging remained the same throughout the campaign.

Did we benefit from other Pepsi MAX content during the campaign activity?

No. The only content that was in market for MAX at this time was the content shared in this paper.

New Learning
Many brands have used YouTube as part of their communications plan, however the vast majority just use it as
another channel in their armoury, with many simply using it as a repository for their TV advertising. This paper
provides guidance on making a significant shift in media strategy underpinned by a coherent content model that
grew sales.

The shift we made was going fromcampaign uploader to content publisher.

From adapting 1 TVC a year to creating 30 films – 60% of which cost under £25k to make.

To deliver the strategy, and keep beating our best, we had to completely re-engineer the way we worked:

Fig 30: A new process

In short, we became altogether more flexible, entrepreneurial and willing to take risks. We became devoted to
creating compelling content throughout the year, both seizing cultural moments opportunistically whilst also
publishing in line with key business periods.

Conclusion
Pepsi Max UK Marketing has been able to completely re-engineered itself to deliver an approach that could truly
resonate with its audience. It went from a traditional marketing model using globally created assets and ATL
media, to adopting a digital first content publishing model.

In doing so Pepsi Max UK has re-engaged Millennials to make it the choice of a new generation once again.

References
1. TGI Most Frequent Cola Drinkers (Jul 2013) – June 2014. 18 – 34s are the biggest and most frequent
consumers of cola and present the biggest volume opportunity
2. E.g. Black eyed peas, Drogba, Henry, Messi, Beyonce
3. E.g. Live to the Max, Kick in the mix, Don't worry there's no sugar, Max it, Live for now.
4. Canadean Cola UK volumes
 5. Millward Brown tracking data – loyalist and switcher perceptions Jan-Apr 2013
6. IPA and Nielsen Analytic Consulting (29th July 2009) 'How share of voice wins market share'. Research
has shown that ESOV above 10% can drive on average 0.5% growth.
7. Google: http://www.themediabriefing.com/article/know-your-audience-how-digital-native-
millennial-generation-consume-media)
8. 2012 Ofcom report
9. Unruly: http://www.marketingcharts.com/online/brands-said-to-represent-less-than-2-of-the-top-
5000-channels-on-youtube-37690/
10. Media Efficiency calculation OMD Analysis - a general calculation using industry benchmarks and costs.
The differential (55%) was based on 16-34 market as of the time
11. The Science of Sharing, Karen Nelson-Field
12. By comparing Q1 2014 digital spend with the reach we would have achieved with the same investment
against TV, the digital plan achieved 75% @5.9, whereas a TV plan would deliver a lower 66% @3.3.
Translated to an average cost per GRP against 16-34s, digital is a much more cost effective £1500
compared to £3367 on TV
13. Source: Nielsen MAT 52 w/e 20th Dec 2013, value
14. Source: Nielsen MAT 52 w/e 20th Dec 2014, value
15. Source: Nielsen MAT 52 w/e 20th Dec 2015, value
16. Source: Nielsen MAT 52 w/e 20th Dec 2013-15, volume
17. Source: Nielsen MAT 52 w/e 20th Dec 2013-15, volume
18. Emotion All Results Pepsi Max Unbelievable AOL Real Eyes Emotional Impact Study March 2014
19. UnRuly ShareRank PepsiMAX study February 2015
20. Kantar 2 year continuous panel to 3rd January 2016
21. Kantar 2 year continuous panel to 3rd January 2016
22. Ibid
23. Pepsi Max media channel spend 2012-2015 Nielsen
24. Nielsen MMM Pepsi UK Media 2014 Review
25. Nielsen MMM Pepsi UK Media 2014 Review
26. Youtube analytics – 1st Feb 2014 – 28th Jan 2015
27. Facebook engagement rate analysis
28. OMD 2014 Media performance review. OMD benchmark is that any earned to paid ratio above 20% is
considered strong
29. Think With Google: https://www.thinkwithgoogle.com/intl/en-gb/case-study/how-pepsi-maxs-
unbelievable-youtube-channel-helped-increase-market-share/
30. Freud's PR coverage review
31. Source: Marketing in the Era of Accountability (Binet & Field 2007).
© Copyright IPA, Institute of Practitioners in Advertising, London 2016
Institute of Practitioners in Advertising
44 Belgrave Square, London SW1X 8QS, UK
Tel: +44 (0)207 235 7020, Fax: +44 (0)207 245 9904

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