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Pepsi Advertisement Illustrates the Need for Market Research

Updated: Jan 3, 2020

Written by: Megan McDowell

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In a recent article on Marketing the author Thomas Hobbs looks at Pepsi’s recent blunder with a Kendall Jenner advertisement. The author writes, that it all began last year at the Cannes film festival when PepsiCo’s president Brad Jakeman criticized the outdated state of ad agencies. His criticism was based on the idea that a company like Pepsi needs to be producing content at a rapid speed and the traditional model of using ad agencies takes too long. His bold plan was to create a content creation studio within Pepsi, which he called Creators League Studio. Jakeman stated, “Instead of five pieces of content a year, a brand like Pepsi needs about 5,000 pieces of content a year. Instead of taking six months to develop an ad, we have six hours or six days. And instead of it costing $2m, it needs to cost $20,000.” While Jakeman’s plan was a bold one, he failed to realize one of the key important attributes that go with the outside ad agency which is an outsider’s perspective. While it is true that content takes a long time to create with an ad agency, part of the reason is the amount of testing that goes into a campaign.

Instead of taking six months to develop an ad, we have six hours or six days.

This past week Pepsi pulled a commercial from the line up as it grew backlash to being insensitive. The question is not about the extent of the failure or how could they get it so wrong, but more about what contributed to releasing an ad that they would later pull. Hobbs cited ad agency founder Andy Nairn, who attributed the incident to Pepsi’s in-house team being rushed to produce a campaign before being properly tested, as well as not having a proper external perspective.

Nairn was very honest with the ease in which a company or ad agency can fail, when he states, “Agencies mess up too, we get it wrong all the time. But if you run an in-house creative department like Pepsi does you need to really interrogate your own approach and make sure you’re not blinkered by your own brand.” Marketing Week went on to look further at the impact bias can have on a company.

Hobbs writes, “A poll of 754 marketing professionals conducted by Marketing Week in partnership with One Poll’s consumer survey reveals nearly half (42%) of marketers believe the brands they work for are failing to reflect a contemporary, racially-diverse, society in their marketing and advertising.” But the brands are not the only one to have bias. Hobbs writes that “on the agency side only 13.1% of staff currently come from a black, Asian, and minority ethnic (BAME) background, according to the IPA.”

Testing is needed regardless of how diverse your staff is. Nairn’s stated for the article, “Even if an in-house agency is filled with people of colour then they will still likely become so wedded to the brand, and see things through the lens of the brand, that they fail to spot tone or how the outside world perceives their brand.”

The Pepsi commercial incident highlights the need for proper testing, and gathering input from outside of the company. As well as being aware of the need to be aware of your own biases and the biases within the company which can create a true loss of perspective. We believe that online community software can help alleviate the majority of the problems faced by allowing your company to gather ideas from the customers in the infancy of the planning stage, as well as throughout, allowing for honest customer feedback which can help guide you through the process with a more balanced perspective.

If you would like to find out more information about how online communities can help your company gain outside perspective please feel free to contact us.

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