Media companies like to warn marketers about the dangers of decreasing ad expenditure, and Pepsi, which fell to third position in the soft-drink industry behind Coca-Cola and Dr Pepper, may serve as a cautionary tale.
According to MediaRadar, which tracks ad spending, Pepsi — long known for commercials with themes like The Pepsi Challenge and stars like Michael Jackson — made the largest ad budget cuts among the top three brands in the first four months of 2024, cutting spending by 46% to $23 million.
Coke, the category leader, and Dr Pepper, which had been in third place, both made cuts, albeit they were smaller. According to MediaRadar, Coke’s spending fell 18% to $78 million, while Dr Pepper spent only 5% less, at $32 million.
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The amount of money spent on TV advertising varied greatly between brands.
Dr Pepper reduced its TV spending by 1%, but it still spent 92% of its advertising budget on television. Coke lowered TV’s part of its spending to 52%, while Pepsi reduced it to 72%.
Dr Pepper spent $29% more on television than Pepsi ($17 million).
Dr Pepper has been gaining share in the soft-drink market for years, according to Beverage Digest, which announced this month that, while both Dr Pepper and Pepsi have an 8.3% share, Dr Pepper is number two.
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Coke remained the top drink, accounting for 19.2%.
“There have been notable TV ad campaigns for soda over the years, from Coca-Cola’s polar bears to Pepsi’s star-studded commercials,” said Todd Krizelman, MediaRadar’s CEO and founder.
“There is a reason why these brands choose to spend more heavily on TV compared to any other format, because TV provides wide visibility for them,” Krizelman told reporters. “Over the past two years, Dr Pepper has contributed the most to TV advertising in terms of spend, with notable campaigns such as the ‘Fansville’ ads.
“Dr Pepper’s prioritization of TV for 2024 may have contributed to it surpassing Pepsi to become the second most popular cola. It would be interesting to watch whether this strategy continues – if Dr Pepper chooses to double down to keep that slot, or if they back down.”
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