Pepsi iTunes Promotion Goes Flat

According to ThinkSecret, by way of Apple’s total iTunes download statistics, the 100 million free songs from Pepsi was a flop.

Only 5 million songs were redeemed from the 100 million available winners, according to statistics reported in Apple’s own download numbers relating to their first year in operation. The question is why? I’m an occasional Pepsi drinker and winner of 12 iTunes caps during the promotion. I redeemed 10 caps in one day (the maximum allowed for one redemption period), lost one cap, and forgot about the final cap until the end of the promotion, so I personally contributed two of the 95 million unredeemed caps. I’m thinking the story goes much deeper than lack of interest in finding winning caps.

Maybe soda containers weren’t the best place to market the promotion. For instance, why was Aquafina not used as part of the promotion? It’s a Pepsi brand I purchase at the rate of at least 3 bottles to every 1 bottle of soda. I probably purchased 18 20-ounce Pepsi bottles to win 12 iTunes. During that period, I easily purchased 50 bottled waters. Using the promotional odds, instead of my own much higher winning percentage, I could have won 16 more songs if Aquafina had been included in the contest. How many other bottled water drinkers would have cashed in songs if Aquafina did a contest?

A more fundamental question is, would more songs have been cashed in if a different company sponsored the promotion? Or do iPod users drink Coke? What if the promotion had run on Pepsi’s Lays potato chips brand instead? I’m not a soft drink marketer, so I don’t know the typical rate of return on a freebie promotion. When the prize is a free Pepsi, I generally cash in 1 out of every 2 winning caps I find, which is a considerably lower return than my personal iTunes experience.

Smart money says if the promotion ran with a WMA serving download site, like Napster or MusicNow, the results would have been significantly better. While iTunes doesn’t require an iPod or a Mac, the perception in the marketplace is that one of those two products is required to play iTunes music. Users outside the United States weren’t part of the promotion, further limiting the number of actively interested parties. WMA-based stores require installing additional software for functionality, but the tunes themselves will play in Windows Media Player. With hundreds of millions of Windows users, the odds are much better a Napster/Pepsi campaign would have fared better.