In my blog of February 10, I was both intrigued and skeptical about the“ Pepsi Refresh” initiative. Intrigued, because it represented everything that an ideal interactive campaign can be – “creative, innovative, highly engaging and very popular, while building on the brand in a fun and social way.” Skeptical, because Pepsi was to grant large sums of money ($5,000 to $250,000) to charities (within selected categories) based on a populous vote of “friends and peers.” Critical thought as to urgency or evaluation of need, did not come into play.

Still, my skepticism faded rather rapidly as Pepsi came up with another angle within its campaign — its “Do Good for the Gulf” Refresh campaign, which has awarded 32 grants each month worth $1.3 million. Now Pepsi has invited consumers to submit ideas that could “refresh the communities of the Gulf states,” through July 16 and has pledged another $1.3 million. Starting August 2, consumers can vote on the ideas they like best. Finalists will be announced on September 2, and grants will be awarded on September 22.

For big brands to spend money on major causes is not new. Nor is it new for big brands or companies to get behind a disaster and offer funds and equipment as needed. If it is also somewhat self-serving, and is based on an ulterior marketing motive, so be it. Still, marketers would do well to note how well the Pepsi’s Refresh campaign worked in that it has empowered the consumer and rallied the public-at-large to come up with ideas in support of a disaster, in this case, the Gulf Oil disaster.

It’s a fine line to cross, however, and can be seen as opportunistic.

In this case, Pepsi has gained recognition for outstanding corporate social responsibility (CSR). It has earned it in a substantive way, for the Refresh Project has given more than $7 million in the first five months of the year and expects to invest at least $20 million in worthy causes.

And it has raised a populous conscientiousness as to charities. How does that get rewarded?

Who would have thought? You are in a mall, walking by a Macy’s store and oops! You get an alert on your smart phone that Macy’s has a special discount for you if you walk in, right now.  Or, you are driving approximately 10 blocks from Taco Bell, and there goes off that alert again – this time with an offer from Taco Bell that’s well worth a stop, rather than the one you had planned on – that coffee shop across the street. It gets better.  If you walk into a store often enough, you will be able to click as you enter on the smart phone location and immediately get on a customer loyalty program, enabling you to add points for future purchases, much like frequent flyer programs with miles.

Of course, you have to be a location app user.

If this sounds futuristic, it’s not. It’s here. Apparently all this was made possible by Foursquare, the location-based social network that introduced a free analytics tool and dashboard last month, giving business owners access to a range of information and statistics about visitors to their establishments.

Innovative marketers have managed to figure out how to maximize this into win-win situations. Just consider — Pepsico and the likes, sell more products, stores get more traffic and the consumer gets special offers geared to his/her likes and tastes.  And there’s another convenience soon to come.  As companies start to turn Foursquare (or other custom location applications) into a virtual loyalty-card program that offers customers discounts or other rewards for shopping, consumers get to toss all those customer loyalty cards that stuff up wallets and use smart phones as a simple replacement for it all.

Savvy businesses like Starbucks, Tasti-D-Lite, Macy’s and Pepsi, are using information reaped from smart phones that can signal someone’s location, to get live information about when and where people are shopping, track store traffic and note when their most loyal customers visit and market to them accordingly.

Of course, you have to want to be tracked and it’s good to remember that being a member of the likes of Foursquare is a proactive choice. But while it was fun and games just to check out who is sitting in the cafe across the street to find friends to meet up with spontaneously, so much information about you, presents a whole new scenario.

It is not only friends who are looking for you now, rather marketers, who are following your moves…

This may cause a momentary shudder (as in Big Brother Is Watching YOU, right out of George Orwell’s book, 1984), but my guess is that in 2010, it is the accepted reality — more so, if you get such advantages as loyalty points, discounts and free sodas.

It may just be that if Big Brother is, in fact watching, it no longer matters…

The world’s largest soda brands face off in a battle for market share and brand loyalty dividing the country into two distinct groups of rival soda drinkers. The cola wars brought consumer engagement to a new level as brand choice was viewed as a lifestyle decision.

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The first time that Pepsi elects to forgo its past 26 years of advertising on the Super Bowl and selects to spend $20 million for a massive multi-channel interactive social media campaign, it collides with the Annual Trust Barometer from Edelman PR, which reports that peer to peer trust has surprisingly waned in favor of more credible sources.  Not that, at first glance, one has anything to do with the other, except that just when viral marketing seems like a smart strategy, smarter than even Super Bowl advertising, the Trust Barometer’s survey results show that trust in friends and peers as credible sources has dropped by almost half, from 45% to 25%, in the last two years.

And the parameters of the Pepsi Refresh campaign is all about the populous votes of “friends and peers” who will decide as to which ideas or projects Pepsi should fund in grant money in six categories: health, arts and culture, food and shelter, the planet, the neighborhoods and education. It will be the people’s choice as to which of the 1000 ideas submitted are to receive grants that range from $5,000 to $250,000, figures not to be taken lightly.  And the criteria for voting is exactly — what?

How does that work?  “Oh this is cool, I think I will vote for this.” Click. Or, “My boyfriend is really into bands, so I think I will vote for that.” Click.  How about, “I’ll feel good if I vote for the local health clinic.” Click.  Some ideas submitted are more political as in “Help free healthcare clinic expand services to uninsured in rural Tennessee (TN).”  Click.  (I live in rural TN.)  Or I live in Kansas so I vote for, “Build a fitness center for all students in Hays, Kansas community.”

Click. Click. Click.  “And the check goes to…” Every month, Pepsi will award up to 32 grants to projects voted on by the most clicks.

By all accounts the “ Pepsi Refresh” initiative is everything that an ideal interactive campaign can be – creative, innovative, highly engaging and very popular, while building on the brand in a fun and social way.  But I venture to say that the challenge that Pepsi faces, and that other companies are bound to also face, as they delve deeper into social media’s ever-expanding communication opportunities is that at some point, critical thinking will matter.

Look, the “Pepsi Refresh” program should be nothing like an American Idol segment where voters root for the next star just because they “like.”  Nor should it be like clicking on “like” on a photo or comment on Facebook.  In creating a program that allows a populous vote to decide on grants, votes that can make a difference as to whether a school’s music program gets funded or whether an elder care facility expands its programs, Pepsi’s challenge is to go against the very fiber of social media’s whims, set a criteria upon which they can deliberate, and turn the populous vote into a credible one.

Failing that, it is but a game — one that is being played out with a lot of money, with no sense of fairness and with little trust in the voters’ selection.

Any serious and worthy projects submitted should not mistake it for anything else.