Why Pepsi’s advertising is re-embracing its challenger brand status

Even two years later, for some in advertising and marketing circles, Pepsi still carries the shame of the Kendall Jenner disaster, but the culture has clearly moved on. Last month the company beat Wall Street analysts’ expectations with sales growing at their fastest pace in more than three years. CFO Hugh Johnston told Reuters, “It is clear evidence that the advertising that we’ve been putting into the market place is working.”

One of those investments was Pepsi’s 2019 Super Bowl ad starring Steve Carell, Cardi B, and Lil Jon. While it was the typical celebrity-filled, big game spot you’d expect from a major advertiser, the joke of the spot revolved around the idea that for most of us, Pepsi’s seen as a runner-up. When a restaurant doesn’t have Coke, is Pepsi okay?

The campaign, which also had a standalone Cardi B “Okurr” spot, was the first for the brand under Todd Kaplan, PepsiCo’s new VP of marketing. Kaplan’s a 13-year company vet, who launched Pepsi’s newer brands like Lifewtr and bubly.

This week the brand is rolling out its full-court marketing press for summer, with integrations on NBC shows like The Tonight Show with Jimmy Fallon and The Today Show, but also a partnership with Instagram called #Summergram that will turn more than 250 million cans of Pepsi into custom-branded AR filters on the social platform. The brand also has hundreds of other #Summergram digital stickers in the Instagram Story’s digital Giphy library.

Kaplan says his strategy for the brand revolves around embracing Pepsi’s status as a challenger, and then making things people can actually use and have fun with. Just as Burger King actively antagonizes McDonald’s with both banter and fun tools like the Whopper Detour, Kaplan says taking on the underdog role is liberating.

“Part of being a challenger brand is really being confident enough in your own skin, who you are as a brand, and also in today’s consumer landscape,” says Kaplan. “Consumers can sniff through bullshit, and so it really comes down to truly acknowledging the world as they see you. And then what’s your point of view? What are you going to do with that? How do you add something back to that?”

Kaplan’s answer so far has been to keep adding to Pepsi’s long history of using celebrities to create spectacle, whether it’s Cardi B at the Super Bowl, or Chrissy Tiegen and DJ Khaled posting their own #Summergram stories, but then also finding ways to drop the brand into your social habits in a fun way. He also considers taking chances with products as another key part of being a challenger brand, citing Pepsi’s recent announcements of new juice-infused flavors, and Nitro Pepsi.

“Consumer preferences are changing, so we need to make sure that we’re talking to the right consumers and that we’re relevant in culture,” he says. “You’ve got to stay one step ahead, and you got to always look for what’s out there, what people are doing, and how people are engaging with your brands. Things like Nitro Pepsi are things we need to be thinking about and looking at as we look to take this brand forward.”

In reality, the brand needs any boost it can get. Despite the encouraging financials, market challenges continue to pressure soft-drink brands, as consumers habits shift away from sugar-drenched options, or legislation like Philadelphia’s soda tax, which led to a local sales drop of 51% in its first year.

“Being a challenger brand is a massive advantage because I think it gives you the license to push, to disrupt, to reframe category norms, to challenge convention–and to have a little fun and push a little bit more,” says Kaplan. “It’s about trying to understand how consumers think, what they’re looking for and really how can we add some fun with it.”