Pepsi Is Stuck in the Third Slot

via http://www.adweek.com/

In recent years, Pepsi has basked in the glory of industry-lauded moves like sponsoring Beyoncé's Super Bowl halftime show and the social-media-and-goodwill-focused Pepsi Refresh Project. For all the splash, though, the efforts haven’t pushed the soda back into either the second- or first-place sales positions that have belonged to Diet Coke and Coke, respectively, for the last two years, per Beverage Digest data.

So outsiders might expect a change in formula when it comes to Pepsi's marketing services. Not so. The brand and Protagonist, which has been Pepsi’s strategy consultancy during a decade of ups and downs, are announcing they’ll continue collaborating as they celebrate a 10-year anniversary.

"It makes us work at a higher level because we have that history," said Angelique Krembs, vp of marketing at PepsiCo. "I cannot imagine not having Mattie to help solve our big problems or bounce things off of."

Krembs was referring to Protagonist CEO Matti Leshem, who was a major force behind the creation of the hyped Pepsi Refresh Project and is helping lead the brand's social vending aspirations.

The high-tech soda machines, which recently tested at Vail Ski Resorts and a handful of other nationwide locations, feature motion-sensory software that reacts to hand gestures and lets consumers buy refreshments, play games and possibly win a Pepsi. While bigger rollout plans are being developed, Leshem said the machines will let people record videos and effectively text message the spots as soda gifts. "It's connecting social media to a product in a way that hasn’t been done before," he said.

Pepsi is not only rebooting the vending machines but also ad campaigns, its bottle designs and seemingly everything in between—with the help of its large roster of marketing partners, led by agency of record TBWAChiatDay. Like all soda makers, Pepsi is vying for attention in an increasingly competitive market that's crowded with energy drinks, flavored waters and iced teas.

"The whole [carbonated drinks] category is declining," said John Sicher, editor and publisher of Beverage Digest. "Most of the big brands are not growing at this point and time."

Added Larry Woodard, president of Graham Stanley Advertising: "The cola segment is shrinking. In fact, Diet Coke didn't overtake Pepsi—it shrank less. It might not be that Pepsi has to do anything other than use its current [celebrity] line-up, visible with a steady stream of commercials, while Coke stumbles with its new strategy of trying to directly address the obesity issue."

Yet Peter Madden, CEO of brand consulting firm AgileCat, put more of the blame on Pepsi.

"Where Coke is consistent in their commitment to their own brand, Pepsi seems more like a kite," Madden said.

Regardless, Pepsi is standing by Protagonist, a 10-person shop based in Los Angeles. "It always helps us to have a new take, particularly on some of our different challenges," Krembs said. "[Protagonist] can turn a nugget into a big idea."