“Apple Computer said Wednesday that about 5 million free songs have been given away through a Pepsi promotion, far fewer than the 100 million tracks that could have been redeemed. An Apple representative said the music giveaway was probably the biggest ever of its kind but admitted that the company gave away fewer songs than it had intended,’ Ina Fried reports forCNET News. “‘We had hoped the redemptions would have been higher,’ said Katie Cotton, Apple’s vice president of worldwide corporate communications. Customers with winning bottle caps have until Friday to redeem their free music tracks.”
“Cotton noted that the yellow-capped bottles with the Apple song codes were late in reaching some key markets. However, Cotton said the promotion did introduce a lot of people to iTunes. The 5 million free tracks Pepsi gave away were included as part of Apple’s statement earlier Wednesday that it has sold 70 million songs in the first year of its music service. Apple said last fall that it hoped to distribute 100 million tracks in its first year, but when that figure was calculated it was expected that more winning bottle caps would be redeemed,” Fried reports.
Full article here.
MacDailyNews Take: Not good. Not good at all. It’s nice to see our suspicions confirmed that Apple would be counting the Pepsi giveaway songs in the one year anniversary total, but only 5 million redemptions? Now, where the hell are those other 95 million caps?!
I think it was too large a promotion considering that the legal music download business is only 2 years old.
I reckon the McDonalds promo will end up the same result.
It’s a new market with a new business model – no one knows how to play this thing totally right yet.
Apple are nearly there though, certainly nearer than any of the competition.
Name Witheld:
Sounds about right, and it also sounds like fraud. There are lews regarding how contests and promotions and if that kind of conduct isn’t against the law- it should be.
Apple were naive kids on the block with this one.
Not only did they not have new computers to sell during the promotion, their mini ipod sales got slammed by not having enough product to sell…and they will get the bad press that most people could care less about Apple itunes stuff.
Any Marketing 101 student will tell you that redemptions of coupons and such only have a 2-5% redemption rate.
And everybody seems to think that everyone wants to download songs from the internet. Not so – this is mainly a under 21 deal and how many of those have cash to buy apple products, let alone a case of Pepsi.
ipod, itunes, etc. are all fads destined to fade…
Why? The entire process of iTunes is just too time consuming and a hassle (however minor it is) to download a song from the internet.
Just as going on eBay was fun for awhile, both buying and selling gets old quick. Too much time wasted, too much hassle.
I never saw a yellow cap Pepsi.
This doesn’t surprise me at all. This is why company’s like rebates, people are lazy and don’t want to be bothered. Factor into that many people still don’t use iTunes and you get a 5% redemption rate.
At the beginning of the promotion Pepsi said it expected to have about a 30% redemption rate. Had that been the case, Apple would have made their goal of 100 million. I don’t think it’s true that people weren’t interested. One look at these boards and you see that people couldn’t find them. Whether that was on purpose on the part of Pepsi or not I don’t know. Keep in mind that people who were looking for them probably didn’t buy Pepsi if they didn’t find them so they lost sales too.
Pepesi is the crack of pops. Coke is the, well, Coke of pops.
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Never saw one bottle in So. Calif!!!
Pepsi blew this one, not including them on their other sodas or 2 liter bottles. (or in Southern California)
Now that Apple and Pepsi have formed this relationship, maybe they can do it properly next time. Apple could mail free pepsi coupons to people who buy iTunes songs and set that to a realistic amount. Maybe shelling out $100,000,000 in iTunes purchases was just too much. That way, you get your songs and the Pepsi purchase is a no brainer…another 2 for one where the consumer wins.
CT
Look at what happened that last time Apple had any connection with Pepsi.
Why expect a different outcome?
5-10% response to promotions, free or otherwise is considered pretty great… so Apple’s 5 million considering the rollout sucked should be considered somewhat of a success. Apple folks always have very high expectations.
Pepsi is so much better than Coke at not hurting you. I don’t know about anyone else here, but drink 5 Pepsi’s: no problem. Drink 5 Cokes: let the burn begin. Since I drink a lot of soft drinks that matters. Guess I should just stop anyway. Oh well.
But Pepsi completely blew it with their distribution. They absolutely suck compared to Coke. Where I live, you go into a convenience/gas station and find Cokes (and DP) galore, well layed out, fresh, and taking up most of the space. Then after a few minutes of searching I find the Pepsi stragglers at the bottom (no I’m not exaggerating) and usually short of diet or regular – take your pick, and sporting whatever promo ended a few months ago.
So I figure, come June 1st, I’ll be finding a whole lot of those 95 Million scattered on the bottom shelves all around where I live.
I am not clear on something: why did Pepsi want to keep redemptions low? Wasn’t Apple on the hook for the wholesale cost of the tune, and not Pepsi? I don’t know how the redemption process worked, perhaps there were handling charges Pepsi wanted to avoid?
Marketing 101, I think you are right on about some of what you posted, but you have not looked at an ebay daily chart recently I bet. It is up 200% this year, for those of you without charts.
Aapl, had they redone their low end desktops, been able to produce enough ipods, and had a better promotional partner, could be breathing the same thin, clean air.
And just in case some of the vitriolic are still awake, the “failings” I noted in my previous post are in no way meant to demean Apple……except for the low end of the desktop line, which is still absurd. Production of a new product and glitzy promotions are tough to manage, sometimes it just doesn’t work out.
Guys, it’s simple numbers game.
The vast majority of people who drink Pepsi are not computer users.
Then if they are, are not interested in downloading music or have the computer to do so or the space on their tiny laptop hard drives.
Most people online still use 56k dial-up, this is a hassle downloading iTunes and then the free song(s) in most areas and ISP’s like AOL who kick you off after a timeout.
Some PC/Mac users don’t have the nerve to download anything over the internet because of lack of skill, knowledge or fear of viruses, trojans etc.
So by the time you factor in all the “filters” 5 million free songs is pretty good and they probably came mostly from folks who already have iTunes installed and were previously aware of the promotion and like to drink Pepsi.
Remember a lot of those caps were on the awful Diet Pepsi as well, in fact it was out on that first in most areas I have been told.
Apple knew they weren’t going to give 100 Million songs away, and Pepsi knew that as well. It was a chance for both to promote each others product.
So I wouldn’t consider this a failure at all, a failure would be if only a few hundred thousand were redeemed.
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The ‘prize’ was far too small for anyone to bother with.
5 free songs per cap and you’re talking
10 free songs per cap (and 10 million possible winners) and this would have been a big hit!
Apple lost big time… Lots of people
(read, Me, and since I did it, tons of others must have also, *BS Alert, anecdotal evidence, your mileage may vary, end BS Alert*)
Lots of people probably didn’t buy songs during the promo period, thinking “hey, there are 100,000,000 out there, and I drink alot of soda, I can win 40-50 songs,… COOL!
Of course from the Superbowl until 2 weeks ago, the only pepsi caps in local stores we plain generic, or already expired old promotion. I didn’t buy any songs while waiting, and by the middle of March lost interest in the promo, AND still didn’t buy any songs. I guess in my case, the free song everyday this week isn’t a thank you as much as a “We’ll throw you 5 free friggin bones, please buy some more songs already”
hey think of it this way, better than 65 million redemptions and only 5 million sales (well i guess Napster or Musicmatch or the rest would kill for even the 5 million sales)
Pepsi dropped the ball on getting the bottles to stores, that is the big “miss” here….
jon.
What’s this McDonald’s promo that everyone’s talking about? Didn’t that get shot down?
I live in Washington D.C. drink a ton of Pepsi and I never saw a yellow cap. Where the hell was Pepsi selling these things at?
Solid: The McDonalds promotion is detailed on the upper left of this page. Scroll up.
New York city didn’t see them until the first week of april, which was a couple of weeks after the “tilt to win” story spread though the web.
If you went out of your way to buy a pepsi for a free iTunes song…Pepsi won. If you stumbled upon the promotion as a regular Pepsi drinker, won a free song, redeemed it and liked the iTunes service, Apple won. If you knew about the contest and were counting on winning but the promotion never reached your market, then maybe you feel slighted. Just be thankful that both products are always available and you can buy them just about anytime.
It’s that regular Pepsi drinker that Apple was after…if Apple ever risks it’s chances again with a similiar promo, it should go the opposite route where the prize is a free Pepsi product. They’ll still get the Pepsi drinkers and Pepsi will get Mac users. Everybody wins! Even the markets where there seems to be less attention given to. (i.e. East Overshoe)
CT
To Joe Mc who sez:
“…but you have not looked at an ebay daily chart recently I bet. It is up 200% this year, for those of you without charts.”
Just a fad, more people on the internet, more people heading to eBay, the number of ebay users will drop or flatten out…and your chart you mention is that the stock price you are talking about? eBay is a 6-month to 1 year game one plays and then one gets burned or bored and buy-buy eBay.
mkting 101…. I have to disagree. eBay is not a fad, it is the most successful business on the internet. I’ve been using eBay since 2000 and buy and sell from time to time. It’s an extremely efficient sales model, for anything & everything (except human body parts). I don’t think it’s going away anytime soon.
“I am not clear on something: why did Pepsi want to keep redemptions low? Wasn’t Apple on the hook for the wholesale cost of the tune, and not Pepsi? I don’t know how the redemption process worked, perhaps there were handling charges Pepsi wanted to avoid?” – Joe McConnel
Because it is Pepsi’s promotion. That is what people (most Mac users) keep forgetting — we tend to blame Apple for bad distribution or praise Apple for distributing free downloads. When the promotion was announced, Jobs mentioned that Apple sold the songs to Pepsi at full price ($.99/song) for any redeemed prizes. Thus, at the moment, Pepsi stands to pay Apple $4.95M ($3.25M of that goes to labels).
Since it’s Pepsi’s money, they should be happy. The rate is 5%, but they did get a lot of exposure. Of course, from Apple’s PoV, Pepsi sucked.