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Inside PepsiCo Labs’ search for the next great gaming startup

A 'glitch' during influencer live streams led to strong results.

PepsiCo is about to cast a net to find 10 startups to work with its blue chip brands. With outreach set to begin this month, The Drum caught up with its head of media innovation and partnership development, Kate Brady, to learn more about the process, success stories and why gaming has become a top priority.

It’s no secret that PepsiCo is big on gaming. Its mass market brands have long participated in what is now a mass market activity, with every generation playing along. But the process in which it identifies up-and-coming platforms remains an overlooked aspect of PepsiCo’s gaming partnership strategy.

PepsiCo Labs, its technology venturing arm, is currently running three gaming pilot programs, with the startups GreenPark, Anzu and StreamElements. While not exactly household names, each has proven to be a success story in its own right — with the snacks and beverage giant ready to take its StreamElements partnership global (more details on each program to come).

These partners, and others, were selected via a systematic process that debuted last year as the core of PepsiCo Labs Digital Marketing Program. This process involved outreach to more than 70 of the top venture capital firms. Each replied back with which companies they believed offered the best solutions based on a series of briefs — one of which was specific to reaching gamers. Last year, more than 300 startups were identified as part of the scouting effort. Twenty partners were selected and at the end of August a three-day immersion session led to the selection of 10 tech partners that aced their pitches and Q&As.

“We look to identify these new startup solutions against terrain where we might have capability gaps,” says Kate Brady, PepsiCo’s head of media innovation and partnership development. “With the gaming space, there are now 2 billion people that identify themselves as gamers across the globe. We’ve got so many brands across our portfolio that we know will speak to those gamers in some capacity, and we’ve also got super endemic brands like Mountain Dew, Game Fuel and Doritos.”

These new pilots work to appeal to this rapidly growing and often hard-to-reach gaming segment, as well as align old brands like Cap‘n Crunch within this new space.

Here are the three startups PepsiCo is currently running pilot programs with...

1. A walk in the GreenPark

As the NBA Finals head into the second round, PepsiCo has its own game going with GreenPark, a virtual platform that offers immersive digital experiences and mini-games. It recently debuted the ’Greenie Rush’ obstacle course, which offers game play and quizzes testing players’ NBA knowledge. Before each NBA game, Mtn Dew sponsors the 3-point prediction card that asks: ’Which team will make the most threes?’ or ’Who will hit the first three?’ The Greenie Rush player with the most points can unlock new in-game gear.

The partnership aligns with Mtn Dew’s sponsorship of the NBA and its 3-point competition with the NBA fandoms within this virtual world. “What GreenPark is trying to do is really flip the idea of how fans can engage with different platforms by having this ongoing, continual connection to gamers and really bringing together different fans in different groups,” says Brady. “The fact that it’s all in happening in these virtual worlds is compelling and a really new way for us to connect with these consumers.”

2. Leveling up in-game placement with Anzu

Mtn Dew, as well as Doritos, has also partnered with Anzu, an in-game, cross-platform media aggregator that looks to offer scale and efficiency across console, esports and streaming. It’s positioned as a turn-key way to reach gamers.

“Anzu allowed us to be more seamless in our connection into specific content versus having to have ad breaks,” says Brady. “It really connected with our consumers by appearing in places that resonated with them that felt authentic and appropriate.”

The results from the placements resulted in an 8% gain in brand memorability and an 11% lift in brand affinity according to PepsiCo studies. “I was really pleased by the high percentage of results that we saw from the Anzu efforts,” says Brady.

3. Stepping up its partnership with StreamElements

StreamElements is a leading platform for livestreamers on Twitch, YouTube and Facebook Gaming. It offers PepsiCo the chance to connection more than a million creators, says Brady.

PepsiCo Labs’ formula for success

1. Opportunity: Labs partners with PepsiCo executives to understand business needs and opportunities that leading-edge technology can solve. ​

2. Discovery: Labs continually cultivates a network of entrepreneurs, venture capital firms and corporate partners to identify the best startup technologies to meet our needs.​

3. Pilot: Labs brings PepsiCo teams and startups together, facilitating a rapid and seamless pilot partnership. ​

4. Scale: PepsiCo Labs partners with business units to scale up successful pilots for a broader impact across the company.​

These connections appear to have paid off especially when it comes to Mtn Dew Game Fuel. The brand found its first success by partnering with a variety of influencers and having a ’glitch’ appear during their broadcasts. This break in the action offered sweepstakes codes and drove them to purchase Game Fuel, which derives most of its sales from e-commerce. As a result of its Game Fuel StreamElements partnership, PepsiCo saw nearly double the benchmarked impressions and had more than triple its projected streamed hours (66 v 20). It has now added Cap’n Crunch to the mix and is looking to launch a global partnership with the platform.

“The goal for us is really to have a deep partnership so that we can then help build their next versions, iterate with them and really be able to test and learn,” says Brady. “It’s mutually beneficial. [At the same time,] we can get efficiencies, competitive advantage and stay on the forefront of identifying what’s new, what’s next and what’s the best way for us to connect with our consumers.”

For more on what the gaming sector’s pandemic-propelled popularity means for marketers, head to The Drum’s gaming hub. And don’t forget to sign up for The Drum’s daily US email here.

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