April 29, 2020
Source: By John P. Desmond, AI Trends Editor
To engage consumers operating in increasingly ad-free environments, PepsiCo, the maker of Pepsi, Mountain Dew and Frito-Lay products, has been relying on the expertise of startups with digital origins.
The trend being called direct-to-consumer is being driven by cord-cutting, e-commerce adoption, and Google’s decision to phase out support for third-party cookies beginning in 2022, according to a recent account in MarketingDive.
“We understand that the marketplace continues to fragment, that media consumption is very different from what it was five, 10 years ago,” stated Kate Brady, head of media innovation and partnership development at PepsiCo. “It’s a core focus of ours to make sure that, whatever we’re doing, we’re future-proofing our business to ensure we can stay connected with our audiences.”
The food and beverage giant two years ago formed a venture arm named PepsiCo Labs, to search for startups that could help the company stay in tune with its customers. The pandemic sped up the timetable, as digital trends expected to hit years in the future took hold in months. The current partners demonstrate a focus on virtual experiences, and enabling speedy decisions in production and media planning.
Google’s Phaseout of Third-Party Cookies in 2022 Causing Disruption
Google’s decision to phase out third-party cookies in 2022 is causing marketers to search for alternatives. Google Chrome made up more than 56% of the web browser market in late 2019, and Chrome accounts for more than half of all global web traffic, according to an account from HubSpot.
Cookies have been used for years to track website visitors and collect data to help target ads to the right audiences. They can also be used to learn about what visitors are investigating when they are not on the company’s website.
In a recent post on its Google Ads and Commerce Blog, written by David Temkin, Director of Product Management, Ads Privacy and Trust for Google, the company also announced that it will not offer “alternate identifiers to track individuals as they browse across the web, nor will we use them in our products.”
Going forward, “Our web products will be powered by privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers,” Temkin stated. The first iteration of new user controls is being announced this month.
The Privacy Sandbox on Google Chromium Blog is described by Justin Schuh, Director of Chrome Engineering, is the initial result of an effort to work with the “broader web community,” including the W3C, to design and implement new technology that preserves privacy while sustaining the open web.
Some 30 proposals were offered. This includes early testing of the Federated Learning of Cohorts (FloC) algorithm, with the promise of preserving privacy and being as effective for markets as cookie-based approach. “This is great news for users, publishers, and advertisers—all of whom are critical for the future of the web,” Schuh stated.
These changes are motivating PepsiCo marketers to innovate. “Things are changing so rapidly now, we really need to be continuing to evolve,” stated Brady in the MarketingDive account. “The goal is, as often as we can, to scale those successes across the organization.”
PepsiCo Working Hard to Identify its Digital Marketing Partners
The PepsiCo Labs team canvassed the organization to identify and share challenges between brands. They then spoke with venture capital firms and entrepreneurs to identify the right startup partners, and worked with the startups on pilot programs, scaling up the most successful.
One company making the cut is Green Park Brands, a virtual experiences platform that Mountain Dew is deploying during the current NBA season. Fans can bet on and predict players’ shots, for example.
“It allows them to gamify this fandom process as well to potentially win points where they can get fan merchandise,” stated Brady of Green Park. “We love the idea of additional gamification and these virtual platforms that fans can immerse themselves in.”
Founded in 2015 in Los Angeles, Green Park is a holding company that creates, operates and accelerates consumer brands, including Hippeas, a supplier of snacks made from chickpeas.
PepsiCo partner CreativeX uses AI to predict where digital assets will perform best, and it analyzes the success of past efforts. “Our tools analyze any creative, anywhere, to give you complete transparency and quantify your creative strategy, output and efficiency,” it states on the company website.
“Now we have the data to show what’s working. And when you have data and opinion, you can create great work,” stated Nandus du Plessis, the Global Head of Content Excellence for AB InBev, in a testimonial on the company website.
Based in New York and founded in 2015, CreativeX has raised $4.8 million to date, according to Crunchbase.
PepsiCo is using startup Mirriad to apply its computer vision technology to insert messages into existing content, to keep it refreshed. The company tested Mirriad on eight Univision telenovelas, initially focusing on the Pepsi brand before broadening to Quaker, Lay’s and Mountain Dew. The company is now planning how to bring the Mirriad technology to its Latin America and European markets.
Founded in 2007 in London, Mirriad has raised $67.1 million to date, according to Crunchbase. CEO Stephan Beringer worked for Publicis Group as Global President of Data, Technology and Innovation prior to Mirriad. The company was founded by Mark Popkiewicz, an entrepreneur with a technology and media background. He is also the founder of Rumblehum Studios of London, an audio entertainment business.
PepsiCo will search for more partners in its next round of outreach later this spring.