COMPARATIVE TV COLA SPOT SPARKS REVISION OF AD LAWS

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LONDON-Pepsi's taste-test spot is under fire in the U.K., and the dispute may usher in a new era of gloves-off comparative ads.

In early October the Broadcast Advertising Clearance Center decided for the first time to allow the mention of rivals' names in comparative ads involving cola taste tests.

Until now, Pepsi-Cola has run an ad in the U.K. stating only, "800,000 people have taken the Pepsi Challenge; 60% preferred Pepsi. How about you?"

The spot didn't identify Coca-Cola as the other tested brand.

The ad quickly drew complaints from Virgin cola, a year-old private-label brand from airline and retail conglomerate Virgin Group.

"The ad is misleading because people think that Virgin cola was included in the taste test, and therefore it is affecting our brand image," said James Murphy, account director at Rainey Kelly Campbell Roalfe, London, Virgin cola's ad agency. "Pepsi [now] will have to include us [in the Pepsi Challenge] or come clean about not including us."

Pepsi doesn't see it that way. Jason Inskip, a Pepsi spokesman, said Pepsi has always wanted to be able to name Coke as the loser in the Pepsi Challenge. But the campaign ended in September and Pepsi has no plans to redo the Pepsi Challenge to include Virgin cola.

Enter the Virgin Challenge. The BACC, responding to Virgin's complaint, earlier ruled that the public knows the Pepsi Challenge is a challenge against Coke exclusively. The irked Virgin then did its own survey asking Londoners to identify the Pepsi Challenge's challenger. Two-thirds of the respondents didn't know.

"The Pepsi Challenge might have been against Coke in the past, but the cola market in the U.K. has changed fundamentally in the past three years," Mr. Murphy said.

Private-label cola sales ring up 20% of U.K. cola sales, up from 9% a year ago, according to A.C. Nielsen. Virgin sells 4% of all cola, a fifth of private-label sales. Coke's share dropped to 51% from 60% in the past year; Pepsi's share dipped to 19% from 20%.

Virgin also commissioned the Harris Organization to conduct blind Virgin-Pepsi taste tests; 50% preferred Virgin and 48% Pepsi.

Armed with their own data-albeit from 900 taste tests rather than Pepsi's 800,000-Virgin and Rainey Kelly are plotting a hard-hitting Virgin Challenge campaign.

Their first attempt was rejected by the BACC as overly disparaging of Pepsi, but Rainey Kelly is working on a new commercial.

"We'll be very open about who we've tested our product against," Mr. Murphy promised.

Uisdean Maclean, the BACC's head of advertising clearance, said Virgin's complaint about the Pepsi Challenge was not the key factor in changing the rules to allow the use of competitors' names.

"We recognized it is no longer just Coke and Pepsi in the U.K.," he said.

"There are a large number of small brands in the marketplace, and Virgin is just another one," Mr. Inskip responded.

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