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Oops! Pepsi and Yahoo! Are Doing It Again

George Mannes

When Britney Spears rips off her jumpsuit during the Oscars telecast Sunday night, you probably won't be thinking about the future of Internet advertising.

But, believe it or not, it may be an appropriate time.

That's because the 90-second Pepsi commercial starring Spears, slated to premiere during ABC's Academy Awards telecast, is more than a 90-second singing and dancing extravaganza extolling the joy of a particular soft drink.

In fact, it's an example of how deep-pocketed, traditional marketers are linking Internet advertising with other media buys. And, for companies like Yahoo! (YHOO Quote), AOL-Time Warner (AOL Quote), health site WebMD (HLTH Quote) and About.com parent Primedia (PRM Quote), they're opportunities for growth in a weak ad market in which most Internet companies are lamenting that old-line advertisers aren't embracing Net advertising as quickly as venture capital funded dot-coms are exhausting their online ad budgets. But it's unknown how much cash any of these deals are generating for the online companies.

The Beneficiary

Yahoo! is the online beneficiary of the hoopla PepsiCo (PEP Quote) is building around the Spears spot. To help create an event around the commercial and the Spears/Pepsi link, including Pepsi's co-sponsorship of the singer's upcoming tour, Pepsi has constructed a site on Yahoo! devoted to the commercial, where Internet visitors in the week leading up to the Oscars have been able to watch preview clips of the commercial's shoot, read Spears' dripping-with-exclamation-points "diary," and enter a contest to win Britney-signed Pepsi merchandise used in the shoot. Starting two hours before the Oscar telecast on Sunday night, visitors will be able to stream the full-length version of the upcoming commercial.

To drive Yahoo! visitors to Britney, in both her online and offline incarnations, Pepsi is buying all the advertising inventory on Yahoo!'s home page over the weekend. It's been running 15-second teaser ads on youth-oriented television networks, such as Viacom's (VIA Quote) MTV, driving people online. And it has been purchasing additional advertising in music-related areas of Yahoo!.

It isn't the first time that Pepsi, which first went online in 1996, has done a major promotion with Yahoo!, or an online campaign coordinated with offline marketing and promotion. Last year, the company produced an online loyalty program with Yahoo! called Pepsistuff.com, which encouraged Pepsi drinkers to redeem points associated with Pepsi bottle caps. And Pepsi ran another online promotion with Yahoo! related to this year's Super Bowl.

But John Vail, director of digital media and advertising for Pepsi, says this time around is different, in part because of the heavy use of television and in part because of the original material on the Britney Web site. In the online counterpart to the TV commercial, the company can give fans of Britney and drinkers of Pepsi not just a chance to see the commercial, but also an opportunity for them to engage more with Pepsi and Spears. It's "the ability to have an all-encompassing experience," Vail says. "It's a Pepsi/Britney experience."

Email Lists

Not just that, but it's a chance for Pepsi to build an email list of members of the Pepsi generation. The Pepsistuff.com promotion with Yahoo! reaped 3.5 million email addresses for the company, he says -- addresses the company used to alert people about the Super Bowl promotion and is planning to use to notify them about the Sunday night commercial.

Murray Gaylord, vice president of brand marketing for Yahoo!, says he thinks there will be more offline/online coordination. "We're going to find more and more ways to find more integrated advertising/marketing/promotional ideas, to extend the power of advertising," Gaylord says. For example, he says the company is working on developing such a program with Compaq (CPQ Quote). "When we're out talking to the big, traditional advertisers, we're encouraging them to get us involved early," he says, "because we can work with them in creating a program that is totally integrated based on what their marketing needs are."

Yahoo! isn't the only online operation doing such deals. Drug manufacturer Eli Lilly (LLY Quote) has recently run at least one television advertisement linked to the company's advertising on WebMD's webmd.com site. That commercial discusses premenstrual dysphoric disorder, a severe form of PMS, in general terms without mentioning a particular drug; it refers viewers to webmd.com, where an ad on the home page leads viewers to a brief sponsored article devoted to the disorder. That page, in turn, leads to Lilly's site devoted to its PMDD treatment drug Sarafem.

The TV commercial-Web site combination is "the first time I've ever seen a major health portal and a major drug company cooperatively advertise," says Jordan Serlin, vice president of Internet operations for Ultimate Health Media, a health care consultancy. Lilly's link to its sponsored article on WebMD "lends additional credibility to the product, even though it's not part of WebMD's traditional editorial," he says.

Making Proposals

Mark Josephson, general manager of the About.com site, says he's busy proposing to potential clients that they link advertisements in parent company Primedia's magazine and television properties with mini-sites within About.com. Josephson says this type of media coordination is "absolutely crucial" to the growth of Internet advertising. "The big brands are demanding it," he says. And for smaller companies not yet advertising on the Net, deals in which print ads drive their niche audiences online can be used to get the marketers advertising on the Internet, he says.

Rich LeFurgy, chairman of the Internet Advertising Bureau trade group (of which Yahoo! is a member) says there's a lot of promise for online advertising as part of multimedia deals. An important piece of the deals that Yahoo! and WebMD have in place, he says, is that the companies are providing resources such as infrastructure and their own brand appeal. The Pepsi promotion, for example, is better off located on Yahoo!'s site than it would have been on Pepsi's, he says. "Yahoo! truly makes a difference here," he says, "because of the brand loyalty people have with Yahoo!."

But, he says, Pepsi's Britney Spears promotion is for now a special case. "Not a lot of companies," he says, "have done a great job of relating different media messages to each other."