Exclusive: Pepsi in space-shuttle talks

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Pepsi-Cola Co. is negotiating a deal for what could be one of the highest-profile promotions in marketing history: an unprecedented $35 million program that would award the winner a ticket to ride on the Russian Soyuz space shuttle.

Should it reach agreement on buying a seat on the rocket, the soft-drink giant would back the program with a powerhouse marketing budget. Among its plans: a reality TV show with contestants competing to win a trip to space. Executives working on Pepsi-Cola's behalf are fashioning a program around the concept and are negotiating with at least one undisclosed network, according to a person familiar with the situation.

The PepsiCo unit did not return calls for comment, although people familiar with the company said the plan fits its move toward bigger, flashier promotions. "Anybody can sponsor a tour," said one ad executive, "but a seat in space is a very unique opportunity."

Said a rival: "It's classic Pepsi."

Details are being worked out for the promotion, expected to begin in summer 2003 and run through the following year. Pepsi would pay about $15 million for the rights to the ticket and another $10 million to $20 million to promote the trip. It is unknown how much of that budget would support producing the TV show. Flagship Pepsi-Cola would be the brand behind the promotion, according to executives and bottlers.

The plan coincides with Russia's dismissal of would-be cosmonaut Lance Bass of `Nsync from the crew earlier this month. The performer had made a bid to go up on the Soyuz on Oct. 28, financed by $20 million in corporate sponsorships-including one unnamed soft-drink company said to be Pepsi. None, however, ponied up, and the Russians said they'd send cargo instead.

One Pepsi bottler said the idea sprouted from Mr. Bass' failed bid, though an executive close to Pepsi said it has tried for several years to work out a space deal only to be stymied by timing, lack of feasibility and questions on how to promote the deal. The bottler said Pepsi is concerned the deal will fall apart if it's not locked up by the end of the month.

PepsiCo has dallied in space before. In 1996, it paid the Russians to float a giant a Pepsi can outside the Mir space station. (Three years later, the entrepreneurial Russians put the logo of Pizza Hut, which PepsiCo had sold by that time, on one of its rockets.)

The estimated $35 million program represents about one-third of Pepsi-Cola Co.'s 2003 promotional budget, according to people with knowledge of PepsiCo's plans. While that's not spare change, it's less than the company spends on mega-promotions such as Pepsi Stuff, according to another Pepsi insider. "It's a lot of money, but it's not unheard of," he said.

influence all around

Pepsi's push comes as Americans' buying decisions are influenced at every turn-not just on three national networks-and their imaginations are captured by the promotions that marry marketing and entertainment. That's where the TV special fits in. The reality-show concept has been a major success for rival Coca-Cola Co., sponsor of the popular "American Idol" on News Corp.'s Fox. Pepsi could support a 12- to 18-episode series on a younger-skewing network such as Fox, General Electric Co.'s NBC or even ABC.

This past upfront, Pepsi's longtime agency, Omnicom Group's BBDO Worldwide and its sibling media shop, OMD USA, struck a yearlong, $1 billion deal for its clients with ABC and other Walt Disney Co. media properties.

Not everyone, though, is wowed by the prospect of Pepsi's plan. One promotion expert said a space shot smacks more of a public-relations stunt than a way to get consumers to genuinely connect with a brand.

Tom Pirko, president of beverage consultant Bevmark, suggested the final frontier had become too mundane to create $35 million worth of buzz.

"So many have gone up and done the same thing that there is very little drama," he said. "There's not enough danger, not enough novelty. ... It's not like people can run around a space ship and fornicate or kill each other or do other things they do on TV."

contributing: kate macarthur and rich thomaselli

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