Earlier this year, Dr Pepper promised to give one can of soda to every American if Guns N' Roses delivered its latest album, "Chinese Democracy." It seemed a safe bet to observers at the time. The album had been so long in the making (17 years) that it was more a punch line than a realistic expectation.
Now, it's official. The album will be released at the end of November, meaning Dr Pepper's promise is coming due. The event is already garnering plenty of buzz for both the band and the soda.
Then again, from a business point of view, the deal raises as many questions as it answers. The album is being released exclusively at Best Buy on Nov. 23. Dr Pepper just happens to have 23 magical flavors. Further, PR shop Ketchum also represents both Best Buy and Dr Pepper.
Numerous calls to Dr Pepper were unreturned. Ketchum directed calls to its client.
Time to honor pledge
"We never thought this day would come," Tony Jacobs, VP-marketing at Dr Pepper, said in a statement. "But now that it's here all we can say is: The Dr Pepper's on us."
Dr Pepper plans to give out the soda through a couponing strategy. Consumers will need to register at the brand's website for a coupon that can then be redeemed at any retailer that sells Dr Pepper. The coupons, which are limited to one per person, will only be available for 24 hours beginning after midnight on Nov. 23. A back-of-the-napkin equation would put 300 million cans of soda (which wholesales in the range of 55 cents a pop) at about $165 million.
But most figure the soda company hasn't taken a huge risk as it's unlikely the overwhelming majority of Americans will be logging on during the 24-hour time window. "To be honest, when I saw it, I thought it was a safe bet," said Patrick West, VP-experiential marketing at Zoom Media & Marketing, explaining that he didn't think the album would actually come out. "I expect they will get a healthy return, in terms of total numbers redeemed. This stunt has a lot of legs behind it. But it's really risky, if only because of the cost of your goods. Obviously that's a bet Dr Pepper is willing to make."
Couponing and sampling experts said that the company could eventually shell out several million dollars in free soda, given the press the challenge has attracted. But Dr Pepper has fewer opportunities for incremental purchases. Similar stunts, such as Taco Bell's free-taco offer tied to the World Series, most often lead to additional purchases, such as a high-margin fountain soda, for example. Last year it was estimated that the fast-food chain spent $5.6 million advertising the promotion, while the giveaway itself cost under $1 million and generated priceless publicity. The stunt was successful enough that Taco Bell is repeating it this year.
Will freebies inspire loyalty?
"The publicity is worth a lot, no doubt about it. You have to measure it against the value of the PR," said Bob Goldin, executive-VP at Technomic. "Will it do anything to build loyalty, you've got to wonder. Those things generally don't, in my opinion. Consumers will feel good about the company for the time it takes them to drink the soda."
Wes Brown, a partner at consumer-research consulting firm Iceology, thinks the promotion will lead to some sort of loyalty among consumers, however. "Dr Pepper could ultimately build some loyalty and some brand consideration out of this," he said. "Because consumers will look at this as a brand that went out on a ledge and is sticking to their guns no matter what it ends up costing them [dollar wise]."
Others say that the association with Axl Rose, especially when Dr Pepper is increasingly relying on music to market its brand, could prove invaluable.
"If you play it right, you could end up building even more PR," Mr. Brown said. "You can make fun of it and say, 'We got them to do in six months what has taken them 15 years to do' or that 'All music fans should be thanking us.' And ultimately, as long as Guns N' Roses doesn't get too upset, you could make a little campaign out of it that will continue to keep the brand in the forefront."
After all, chances are slim Dr Pepper would have been able to ink any sort of formal deal with Axl Rose.
"The brand association with Guns N' Roses and Axl Rose might be something that they would have had to pay infinitely more for than they ever could have afforded," said Mr. West.
Band with a long past
Then again, others might point out that Guns N' Roses, which hasn't been heard from since last century, comes with plenty of baggage, including its frontman. Axl Rose, after all, hasn't exactly aged as gracefully as Mick Jagger.
Ultimately, the promotion will work double-time for them, pointed out Dean Crutchfield, a brand consultant. He said that it is a good way for the company to re-engage with an older audience, maintain its core fans and introduce the brand to new consumers. "What I like about this, at the end of the day, is they are riding two horses at one time, and that's what's important and unique here for Dr Pepper," he said. "In branding, they say you're looking for more users, new users or new uses. Clearly they are not going to get new uses, but they are certainly aiming for new users. This is a smart deal that will get them a lot of publicity, depending on the amount of publicity that Guns N' Roses will get. That will be the acid test."