Social media marketing campaigns are proving to be goldmines rich with customer engagement and insight that companies wouldn’t likely have otherwise. Companies like PepsiCo are going to extensive lengths to foster this type of collaboration with fans, and the payoff has been big.

The company’s Mountain Dew division is several stages into its DEWmocracy campaign — a plan to launch a new Mountain Dew flavor with the public’s involvement at all levels of the process, and PepsiCo also just launched the Pepsi Refresh Project on January 13th. Rather than spending money on Super Bowl television ads this year, the company is spending $20 million on a social media campaign.

Jay Baer, founder of the social media strategy company Convince & Convert, said brands are realizing they need to market for the long haul. “I do think it’s a good move for Pepsi. I don’t know if every brand can pull it off,” he said.

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.

A Closer Look at Mountain Dew’s Social Media Campaign

The first DEWmocracy campaign launched in 2007. This inaugural DEWmocracy effort let consumers choose Dew’s new flavor, color, name and graphics, and resulted in more than 470,000 people voting and an overall 1 million people taking part in some phase of the process, according to the company’s DEWmocracy media site. The winning new flavor, Voltage, hit store shelves in January 2009.

Brett O’Brien, Mountain Dew’s marketing director, said that for the first campaign a site was built for people to interact with, which made sense at that time.

Fast forward to July 2009, when the second DEWmocracy campaign launched. The multi-stage effort tasks die-hard Mountain Dew fans to narrow seven sodas down to one final new flavor that will become a permanent part of the Mountain Dew family, using social media platforms (), Twitter (), Facebook () and YouTube () in the process.

O’Brien said that with the explosion of social networking, they felt it was best to interact with people where they are.

Flavor Nations Play a Large Role

The second iteration of the Mountain Dew campaign is fueled by the 4,000-strong DEW Labs crew, an online community of die-hard fans. The DEW Labs are divided up into three Flavor Nations for the three Mountain Dew soda finalists: Typhoon, WhiteOut and Distortion. Once the three flavors debut in April, the Flavor Nations must talk up their flavor and get people to vote for it to become the permanent new Mountain Dew soda. That one winning new permanent soda flavor will debut on Labor Day, according to the company’s DEWmocracy media site.

O’Brien said the several stages involved are really part of the normal product innovation process. He said if they were going to be totally transparent the whole time in launching a new Mountain Dew flavor, they needed their customers to be there the whole time.

Every part of the campaign involves the fans and the public — from picking flavor names, to voting on the best user-submitted ad campaign.

Collaboration With Consumers

“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.

“To me, that’s tremendously exciting,” he said. “To me, that’s the social media story.”

Social Media Marketing: How Pepsi Got It Right