Pepsi/Jacko combo reported in WSJ “I see it being massive”

By PAUL ZIOBRO And BEN FOX RUBIN

PepsiCo Inc. PEP +0.12% once again is turning to the King of Pop to advertise its flagship cola.

Pepsi is joining with Michael Jackson‘s estate to use the deceased music icon’s image in a global Pepsi marketing campaign. Pepsi has used a Jackson tie-in several times in the past, but the move shows just how closely Pepsi is aligning its flagship drink with music to help spur sales of soda, the area of Pepsi’s portfolio that investors are most eager to show some buzz.

A spokeswoman for the estate said it was the first branding deal since Mr. Jackson passed away. The estate is planning more such marketing deals, she said.

PepsiCo and the estate declined to disclose the terms of the deal.

The Jackson campaign will first focus on two enormous markets—the U.S. and China—with both expected this month to sell limited-edition cans featuring Mr. Jackson’s image.

Pespi hopes to expand the campaign to 20 additional markets in Asia, South America and Europe throughout the rest of the year.

Pepsi first joined with Mr. Jackson in the early 1980s in a then-record $5 million sponsorship deal that became a benchmark for integrated marketing campaigns and paved the way for celebrity pitchmen. The campaign gained notoriety when Mr. Jackson’s hair caught fire from pyrotechnics during a commercial shoot at the Shrine Auditorium in Los Angeles in 1984. Pepsi paid Mr. Jackson $1.5 million following the incident.

“We are thrilled to bring Michael and Pepsi back together, as they were in 1988, to celebrate the 25th anniversary of the ‘Bad’ album and tour, and to put Michael on one billion Pepsi cans,” said John Branca and John McClain, co-executors of Mr. Jackson’s estate.

PepsiCo has been turning its attentions back to the marketing of the flagship brand recently.

Although the company has a diverse portfolio of brands, including Frito-Lay, Quaker Oats and Tropicana, it often is judged by the performance of its namesake cola. And in 2010, Pepsi was knocked out of the No. 2 spot among sodas in the U.S. by Diet Coke, with Coke remaining in the No. 1 position, according to the industry tracker Beverage Digest.

Pepsi last month reported that volume in its Americas beverages unit slipped by 1 % in the first three months of the year.

Last week, the company said its first-quarter earnings fell 1.4% on higher costs as revenue growth slowed and sales from Americas beverages continued to slide.

Some branding experts bemoaned the move to use Mr. Jackson’s image, saying it was risky.

“It’s like the dead is dancing to sell your product, it feels crass,” said Scott Lerman, chief executive of Lucid Brand, a branding firm. “There is a big creepy factor with this.”

In 2007, ConAgra Foods Inc. CAG -0.08% reincarnated company spokesman Orville Redenbacher, who had died in 1995. The company used a computer-generated version of Mr. Redenbacher, who had received a modern makeover.

Consumers revolted, and the character in some quarters was dubbed “Orville Deadenbacher.”

But some branding experts said they expected the use of Mr. Jackson would help the brand in markets outside the U.S. “I see it being massive in Asia. Jackson’s popularity is massive in the Asian marketplace,” said Dean Crutchfield, a branding expert.

—Suzanne Vranica
and the Associated Press
contributed to this article.

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Author: Dean Crutchfield

In an award-winning career spanning two decades, Dean Crutchfield has created, built and re-invigorated some of the world's most iconic brands.

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