Gator Baiter: Powerade Jabs at Powerhouse

Coke Brand Goads Gatorade in Push Pegging Sports-Drink Category Leader as Less 'Complete'

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NEW YORK (AdAge.com) -- The billboard shows the vertical half of what appears to be a Gatorade bottle on one side, with the other side open to the bare blue sky. But what might at first be taken for a mistake is explained by the text: "Don't settle for an incomplete sports drink." A few feet down the road perches another billboard, this one showing a fully intact bottle of Powerade. It's tagged: "The complete sports drink."

Pulling no punches: Powerade claims rival Gatorade just doesn't have it all.
Pulling no punches: Powerade claims rival Gatorade just doesn't have it all.
It's a classic challenger strategy, except it comes from one of the world's biggest marketers, Coca-Cola Co. The company might be a giant when it comes to soda, but in sports drinks, Coke's Powerade runs in the shadow of PepsiCo's Gatorade. So in true competitive fashion, the smaller rival is undertaking a bold and innovative print and outdoor effort that positions the category leader as only half the brand Powerade is.

Powerade's plan is to blitz the market with messaging that Gatorade is an inferior method of hydration, and says it has the science to back it up. Since early last year, Powerade has been in the lab reformulating its trademark sports drink to include four electrolytes -- sodium, potassium, calcium and magnesium -- lost during exercise. Gatorade's formula contains just two electrolytes, sodium and potassium.

"There have been great advancements in a lot of other categories in sport over the last few decades, and there's been little to no innovation in the sports-drink category," said Matt Kahn, senior VP-marketing for Powerade. "John McEnroe used to play with a wood racket, but you don't see Rafael Nadal or Roger Federer playing with a wood racket now."

To get its message across, Powerade, along with its agency of record, New York-based Ammirati, developed a clever comparative campaign that pits the brand against PepsiCo's Gatorade. "They're the lion in the category, and we wanted to compare what our drink does for you vs. the competition," Mr. Kahn said. "People associate [Gatorade] with the category. When you're another brand competing, you want to make sure to give people a point of difference."

Cover takeover
Powerade also worked closely with its media partner, Starcom MediaVest Group, New York, to break new ground. For instance, the brand will take over the cover of the April 6 issue of ESPN The Magazine, marking the first time the publication has mingled editorial properties with advertising on its cover. It will feature a blank flap obscuring half of the cover image but retaining the magazine title. The front of the flap states, "You wouldn't want an incomplete cover." And the back of the flap shows half a Gatorade bottle with the text, "Don't settle for an incomplete sports drink." Powerade is then held up as the "complete sports drink" on the inside of the front cover.

Ed Erhardt, president of ESPN customer marketing and sales, said the cover concept, along with seven- to 10-second video vignettes and a first-of-its-kind GameCast integration on mobile phones and ESPN.com, make for a compelling campaign. ESPN personalities interview Powerade athletes in the vignettes, riffing off the "complete sports drink" concept by asking the athletes to complete sentences. "What we like about it is that [the] print and digital work quite well together to make this jump off the page and the screen," Mr. Erhardt said.

When asked whether there was some concern that having ESPN personalities effectively shill for a brand that competes with Gatorade -- a huge sports advertiser -- might concern PepsiCo, an ESPN spokeswoman said, "We work in categories that are competitive across many lines of our business, and our goal is to provide value to all involved."

Powerade is also running a digital effort, including a revamped website and banner ads, led by Juxt Interactive, Newport Beach, Calif. A sampling program targeting kids is on tap as well. "This campaign is a solid one. It's direct and easy to understand," Mr. Kahn said. "We need people to notice, to talk about it and be influenced by it." The billboards will run in 16 markets.

Not since 2001
According to Beverage Digest, Powerade controls 22% of the sports-drink market, while Gatorade has a 77% share. Yet Powerade hasn't done a major marketing campaign since 2001. Last year, Powerade spent $15 million on measured media, excluding internet and national spot radio, according to TNS Media Intelligence. Mr. Kahn said the new campaign represents a bigger marketing investment for the brand.

Visual 'ade': Half billboards represent Gatorade's incompleteness as sports drink.
Visual 'ade': Half billboards represent Gatorade's incompleteness as sports drink.
Still, the overall sports-drink category has been lagging. Beverage Digest reports that volume declined 7% in the third quarter of 2008, followed by a 4% decline in the fourth quarter. Mr. Kahn attributed that to the ailing economy, which has seen consumers turning to cheaper private-label brands, as well as tap water. But he said 2009 is off to a strong start. Volume is up for the brand, thanks in part to strong adoption of Powerade Zero.

The new formula, which will have completely replaced the old drink by April, is currently limited to the U.S. But Mr. Kahn said Canada, Mexico and some European markets are looking closely at adopting it. The Powerade Zero platform could also be reformulated in the near future.

For its part, Gatorade is shrugging off the attack, maintaining that all Powerade has done is create a spinoff of its Gatorade Endurance Formula, developed in 2004. "In contrast to their claim, science tells us there is no ratio of electrolytes typically lost in sweat," said Pete Brace, director-communications at Gatorade. "Everyone sweats differently, both in the amount of fluid and electrolytes they lose in sweat. Nothing rehydrates, replenishes and refuels better than Gatorade."

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