PespiCo Makes an Interesting Marketing Decision

The cited piece says that PepsiCo is targeting online platforms for its latest round of promotional activities. Apparently, the powers that be believe that the expensive slots available at the football extravaganza aren't necessarily the best way to get attention for its brands.

I agree: a 30-second spot at the Super Bowl will set you back up to $3 million. Still, if there's one program that can almost guarantee you a huge audience, it's the Super Bowl. And it's become cliche by now to say that people tune in just to watch the ads.

Perhaps, though, that's one of the best reasons not to advertise on this asset. Arguably, there's too much pressure to make a great commercial. And sometimes, in the quest to make the most awesome spot ever, companies risk potentially crossing lines in terms of taste.

Even forgetting the risk of appropriate content, here's another point to ponder: a company's spots may fall flat and be perceived as boring. This could be a worse problem.

So, if your Super Bowl investment fails, you not only have wasted the money to buy the time, you've also wasted the money to produce the commercials. And the latter cost is certainly not insubstantial.

PepsiCo has made a fascinating choice, and I'll want to hear any reports about how the online campaign is working out. I would agree that, in the end, the Super Bowl isn't wholly necessary. It is very useful, no doubt, for many marketing schemes, but I'm glad that, in an era of economic uncertainty, management teams don't necessarily do the default thing. Better capital allocation should trump the allure of media spectacle. Of course, it was reported that Frito-Lay will be supplying spots to the game, so PepsiCo shareholders will see some activity from their company in the advertising fest.

As far as PepsiCo shares go, they currently sport a decent yield, and they could become attractive in coming months since many pundits have been highlighting the need for dividend-paying equities to be used as core holdings for a portfolio in tough times. The best way to engage a stock like PepsiCo is via a buy-and-hold strategy. I myself own Coke, and have held that one for over a decade, happily dollar-cost-averaging and reinvesting the quarterly payments along the way.

Disclosure: I own Coke; positions can change without notice.