Pepsi taking a pass on Super Bowl

Will Pepsi's decision to sit out Super Bowl XLIV go down in history as a fumble?

By James Dlugosch Dec 17, 2009 3:37PM

Jamie DlugoschCount Pepsi (PEP) with the likes of the NFL's dismal Rams, Lions and Chiefs. The giant's soft drinks aren't going to the Super Bowl, either.

 

Pepsi's decision to bow out of the big game after a 23-year run is an official choice to focus on a new soda marketing effort built around community service, one a company official told The Wall Street Journal is too hard to explain in a 30-second ad.

 

Still, the announcement created quite a buzz on advertising and sports-related Websites, and for good reason.

 

5 Reasons Why Investors Should Drink Up Pepsi Stock

 

The Super Bowl is a premier advertising event and offers a unique opportunity to expose products to a huge consumer audience. It may be expensive -- some spots are going for $3 million for the 2010 game -- but there is no better way to get your brand in front of so many people.

 

Speculation about the decision being linked to the economy was rampant. These days, companies don't want to be seen spending gobs and gobs of money at a time when people are hurting.

 

But hey, the Super Bowl is all about excess, and no one watching would complain. It's the one game where people actually tune in to watch the commercials. And CNNMoney.com reported recently that the ads were 90% sold out by Thanksgiving, so companies are buying time.

 

FedEx (FDX) did say today that it was skipping the Super Bowl due to costs, but it's the only company on record with such a choice. And other Pepsi products reportedly will be advertised, further complicating the issue.

 

It's a bad call by Pepsi, in my opinion. The absence of Pepsi drink ads leaves the door wide open for Coke. And I expect them to take full advantage of the opportunity.

 

Perhaps Pepsi knows something that we don't, but it's a big risk to walk away from something that previously worked so well for the company.

 

However, the move by Pepsi to skip Super Bowl XLIV is the kind of risk-taking that tends to be rewarded in our market-based system. Check out 5 Reasons to Buy Pepsi here.

 

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