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Previously, we had been wondering what Pepsi was going to do with their money, since they chose to not advertise during the Super Bowl.

Now that we know where the money went, it may be surprising to say, but it looks like they made the right choice.

Introducing the Pepsi Refresh Project and DEWmocracy.

The Pepsi Refresh Project and the DEWmocracy campaigns are part of a crowdsourcing effort that’s part of the larger PepsiCo plan to more closely integrate consumers with the brand. “Driving consumer interest and engagement takes imagination and often a certain amount of reinvention, so it’s fair to say we’re rethinking everything we do from product development to marketing campaigns across our entire portfolio,” said Bart Casabona, a Mountain Dew spokesman.

What we’re calling it [is] collective intelligence,” O’Brien said. “It’s less about crowdsourcing, but more about collaboration.” PepsiCo looks at DEWmocracy, which has literally been driven by word of mouth, as a way of doing business rather than an ad campaign, he said, and the most important thing to recognize is the passion consumers feel for Mountain Dew is like nothing that’s out there.

According to O’Brien, PepsiCo looks at social media as the best way to get direct dialog with their fans and for the company to hear from those fans without filters. “It’s been great for us to have this really unique dialogue that we normally wouldn’t have,” he said. “It really has opened our eyes up.”

Convince & Convert’s Baer said the DEWmocracy campaign fits with Mountain Dew’s brand and customer profile. He said giving customers ownership of the brand is a fantastic idea.

“What they’re trading off is reach for depth and they’re trading short-term impact for long-term impact,” he said. Baer sees the process of brands asking customers to craft better products or services as a trend. He pointed out that companies aren’t just soliciting customer input, but they’re putting it into practice. And some business decisions are now based solely on customer feedback. (via Mashable)

Interesting.  Basically, like was mentioned in the article, Pepsi is using social media not as an advertising campaign, but as a way of doing business.  They’re using social media to actually let the fans choose the product from top to bottom; name, flavor, packaging…everything.  Of course, this amount of engagement not only makes the customer more likely to buy the product, it brings with it the likelihood of repeat business; which is great news for Pepsi.

So, in the end, what did Pepsi get?  They skipped a star-studded commercial about their Pepsi product, which would have maybe been remembered by consumers for a few months or so, and replaced it with allowing the consumers to design a product, leading to potential long-term engagement.

Maybe the Super Bowl ad doesn’t look so good after all?

Of course, this only works with Pepsi because they are already established in the American marketplace.  An upstart company probably couldn’t pull off this same move because they wouldn’t have generated the user-interest in their products.  But, for Pepsi, it looks like it works.