PepsiCo Prioritizes Publisher Partnerships Over Programmatic For In-Game Marketing

PepsiCo's brands, including Mountain Dew, are a consistent presence in the NBA 2K series of games.

Advertisers are starting to see video games as an opportunity to reach audiences that have abandoned traditional media channels like TV.

But gamers can be protective of their digital spaces and tend to be wary of brands that try to inject messaging into what they see as their refuge from other ad-saturated environments.

That’s why PepsiCo’s video game marketing philosophy revolves around gaining a gamer’s trust through three main methods: being authentic, adding value and creating a consistent presence in the gaming community.

These priorities have helped PepsiCo integrate its family of brands into highly sought-after video game fandoms, such as Call of Duty and NBA 2K, PepsiCo’s head of esports and gaming, Paul Mascali, told AdExchanger.

Currently, PepsiCo focuses on in-game integrations and around-the-game sponsorships resulting from direct partnership deals. Programmatic only represents a small portion of its video game marketing efforts, Mascali said.

Authenticity and added value

PepsiCo’s approach to video game marketing speaks to certain truths about the gaming sphere.

For example, gatekeeping is prevalent in gaming communities and gamers are quick to mistrust any attempted engagement that tries to co-opt gaming culture without a true understanding of the fandom in question.

“We want to make sure we fully understand the individual community that we’re trying to reach and that we’re talking to them in the same language they’re used to,” Mascali said.

In other words, brands should avoid becoming the “How do you do, fellow kids?” Steve Buscemi meme.

Gamers also tend to be cord cutters who are generally suspicious of advertising. But they appreciate the role ads play to keep some games free-to-play and in funding industries that have made gaming a viable career path, like esports and streaming on platforms such as Twitch and YouTube.

The best ad campaigns in the gaming space tend to be ones that offer a real value proposition for gamers, Mascali said.

For example, PepsiCo runs a recurring on-pack promotion where Call of Duty players can redeem codes found on Mountain Dew containers to unlock exclusive in-game power-ups and cosmetics, such as a Doritos charm decoration for your weapon.

Engagement with the fandom

As with any insular social scene, gamers can be skeptical of new faces. But familiarity can go a long way. While brands may be met with scorn at first, they can win gamers over by becoming a consistent presence and actively supporting their communities, Mascali said.

PepsiCo has been engaging with the Call of Duty fan community for years. Beyond embedding ad placements in the games themselves, including Mountain Dew and Doritos assets placed in Call of Duty: Black Ops Cold War (featuring 1980s packaging and logos), PepsiCo has struck up partnerships with influencers like Dr DisRespect and has sponsored Call of Duty esports teams and events.

Likewise, PepsiCo’s Gatorade brand has become as ubiquitous in the digital arenas of NBA 2K as it is at real-life basketball games. “Gamers are looking for Gatorade coolers on the sidelines because that helps replicate that realistic experience,” Mascali said.

This level of deep integration has opened up the opportunity for other static in-game ad experiences that have become fixtures of the NBA 2K series, such as the Gatorade Training Facility (where players level up their career-mode characters) and a replication of the real-life Mountain Dew 3-Point Contest.

This type of in-game placement has delivered billions of impressions for PepsiCo brands, Mascali said.

Programmatic vs. static

Static in-game advertising involves a direct relationship with the game’s publisher, and those integrations are hard-coded into the game itself rather than dynamically placed. Because of the long development cycles for top-tier games, these sorts of campaigns require a lot of planning and coordination between the brand and the publisher, Mascali said.

Programmatic is a different story. The campaign flights are shorter, and the cost commitment is lower, which makes programmatic well-suited to brands that don’t already have a firmly entrenched presence in video games, Mascali said.

Currently, PepsiCo does not work with any DSPs or SSPs but it has placed some programmatic in-game ads in partnership with Anzu. And PepsiCo is intrigued by advances in ad tech that can open up more standardized, turnkey programmatic advertising opportunities in games, Mascali said.

But in-game measurement is still a very important missing piece for everything from ads to influencer-led campaigns, Mascali said. “There’s still a lot of work to be done around better quantifying what ROI means to brands in this space.”

PepsiCo has used Nielsen as a third-party measurement partner, he said, and it’s “keeping an active eye on” attention-based measurement solutions like those provided by Frameplay.

Which raises an interesting question: Which KPIs are brands aiming to achieve, and therefore measure, in the gaming space?

PepsiCo wants to expand its reach and maximize impressions and engagement, Mascali said, citing the 60% of Twitch fans that don’t watch TV as an example of an audience that can’t be reached through other means.

The company is also looking to work with measurement partners to better understand how video game marketing affects brand affinity and purchase intent.

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