Watch the Spot

New Pepsi Ad Tweaks Coke With Help From Santa

Cola Wars Now Involve Full-Calorie 'Blue Can' Brand as It Looks to 'Own the Summer'

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PepsiCo is out with another ad tweaking the competition.

A new campaign, "Summer Time Is Pepsi Time ," for the flagship Pepsi brand, takes a swipe at rival Coke with a little help from Santa Claus. It's the third effort from the company in the past year to attack a Coca-Cola brand. Late last summer a Pepsi Max spot took on Coke Zero, and in March Sierra Mist took aim at Sprite.

"Its right for Pepsi to play with this inside joke that in summer time everybody drinks Pepsi, even the most iconic Coke celebrity, which is Santa," said Massimo d'Amore, CEO-PepsiCo Beverages America, adding that the "spirit" of the campaign is closer to the Pepsi Max ads than to the comparative Sierra Mist ads. "Hyper-competition is always good to sell more soda. Consumers love the cola wars. Since we launched the Max campaign, Max is growing triple digits and Coke Zero is still growing, so everybody wins when we get into the cola wars."

The ads are also meant, in part, to silence critics and pacify bottlers who have complained that Pepsi hasn't paid enough attention to its full-calorie flagship brand. Measured media spending behind the brand has dwindled in recent years, falling to $154 million in 2010 from $193 million in 2006, according to Ad Age 's Leading National Advertisers Report, while spending has also focused on Pepsi Max and, more recently, Diet Pepsi. Last year PepsiCo shifted its major sports sponsorships from Pepsi to Pepsi Max. And Diet Pepsi had a significant presence earlier this year at New York's Fashion Week, and is currently running a campaign featuring Sofia Vergara to promote its recently launched Skinny Can.

Compounding the situation, Diet Coke surpassed Pepsi as the country's No. 2 soda in 2010 behind brand Coke. In the wake of that news, PepsiCo said it would pump up spending behind its beverage brands by 30%.

"We have, in the last nine months, relaunched Max [and focused on] Diet, so it's normal now that we bring the action and excitement to the 'blue can,'" Mr. d'Amore said, referring to the flagship brand. "We have six months of really heavy communication weight on Pepsi, following the first six months which were heavy on Max and Diet. I can assure you the alignment with the bottlers and their morale [is good]. They're very satisfied now and looking for creative ways to activate the ['Summer Time is Pepsi Time '] campaign in their markets."

Mr. d'Amore added that on the heels of the summer campaign, activity around Fox's fall series "X Factor" will pick up. The Simon Cowell-created singing competition will focus on Pepsi, which could be a major boon for the brand if the show's success mirrors that of "American Idol" and its Coke sponsorship. "We're feeling very good about the next six months on Pepsi," Mr. d'Amore said.

In the "Summer Time " spot, which was created by Omnicom Group's TBWA/Chiat/Day and broke last night on ABC's "The Bachelorette," Santa parties on the beach to the 1990s hit "This Is How We Do It." When he goes to get a soda, the bartender serves up a Coke, but Santa turns it down and asks for a Pepsi. "Pepsi? But Mr. Claus, I thought you had a deal with ... you know," the bartender says. Santa replies, "I'm on vacation; I wanna have a little fun." A second spot is also on tap from TBWA. The campaign also includes radio, out-of -home and digital buys, as well as social-media elements. Today, for example, the "Naughty Elf" from Pepsi's TV spot will take over the brand's Twitter handle. And a Foursquare partnership will see consumers checking into hot summer locations, such as beaches.

"We want for Pepsi to own the summer," said Mr. d'Amore. "It's a time when people want to have fun, go on vacation. ... The entire blue system, whether the bottlers or ourselves, is committed to really owning the summer."

In addition to the campaign, this summer will also be a busy time for the newly restructured marketing teams at PepsiCo headquarters. As first reported by Ad Age , Pepsi created three new marketing roles amid the departure of Jill Beraud, chief marketing officer-PepsiCo Beverages America. Brad Jakeman, former exec VP-chief marketing officer at Activision Blizzard, has taken on the role of president-global enjoyment and chief creative officer. He will focus on trademark Pepsi, as well as the company's other soft-drink brands. Lorraine Hansen, a Kraft Foods alum, joined the company as senior VP-global hydration. And Simon Lowden moved from Pepsi International to become CMO of PepsiCo Beverages Co., which has responsibility for North American beverages excluding Gatorade and Tropicana.

Mr. d'Amore said the executives will be settling into their new roles in the next month, with Mr. Jakeman and Ms. Hansen expected to be "fully operational" by the end of July. Mr. d'Amore said that he believes the new structure, which introduces global roles, is the "right structure" for the company.

"It's the first time we really have a global brand management for the beverage business of PepsiCo," Mr. d'Amore explained. "This is the right of passage from a multi-regional to a global company. I think this is a huge enhancement to the way we run the beverage business around the world, and because of the new structure and quality of the people we appointed, we're not losing any focus on the U.S."

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