Mark Vandegrift
Welcome to the Brand Shorthand Podcast. I'm your host, Mark Vandegrift, and with me today is the Queen of "Quantent" Marketing, I mean, Content Marketing, Lorraine Kessler.

Lorraine Kessler
I thought you were going to say "quantum marketing".

Mark Vandegrift
"Queen of Quantent", it just- Queen of Content just doesn't sound-

Lorraine Kessler
Maybe we should have quantum marketing, you know. There's quantum physics.

Mark Vandegrift
Yeah, Queen of Quantum Marketing, I like it.

Lorraine Kessler
It's like, you know, four dimensional, four dimensional.

Mark Vandegrift
There's a new book for you.

Lorraine Kessler
Yeah. Four dimensional marketing, right? Yeah, I agree with that.

Mark Vandegrift
Well, instead of looking forward, let me throw you back a little bit. Do you remember, or, I don't know if you do, you know about the Pepsi Points. Right? You familiar with that?

Lorraine Kessler
Right. The promotion, you mean, from-

Mark Vandegrift
Well, just the Pepsi Points. There's the case that they had in the late 90s and the lawsuit of Leonard v. PepsiCo Inc. I don't know if you remember that whole lawsuit. Do you recall it?

Lorraine Kessler
No, but I remember we were going to talk about promotions. So I had like a vague recollection of this because in my prior agency, I kind of handled all the promotional campaigns that we did for that agency because there's some legalities and things you have to be aware of. So I do recall this one and I did do some research since we talked about maybe promotions being a point of discussion today.

Mark Vandegrift
Oh, okay. Good. Well, do you know anything about the lawsuit itself?

Lorraine Kessler
Yeah, and you know, maybe if you want me to explain a little bit.

Mark Vandegrift
Yeah, go for it.

Lorraine Kessler
I think the point here is that promotions are a great way to support your brand while creating sales, but anything can go wrong and usually or often does. So, this is one where some things went wrong that I think don't think were necessarily intended by Pepsi, nor any way could be anticipated. I think it was around the late 90s that they had this drink Pepsi and get stuff campaign. Pretty straightforward. It's a pretty straightforward promotion. It's a barter program. You earn Pepsi Points when you buy stuff and you can trade that for physical items. That's perfectly fine. But the thing they did that was extreme in this is they did a TV commercial where this protagonist flies a McDonnell Douglas AV-8D Harrier II, I don't know, some vertical, one of those vertical takeoff military style jet aircraft, I think into a school, right? Was it into a schoolyard?

Mark Vandegrift
I think it was, yeah, where they are having recess or something.

Lorraine Kessler
Yeah, he doesn't fly it into the school, but he flies it into the school yard.

Mark Vandegrift
No, no. After 9-11, that's not something we want to talk about.

Lorraine Kessler
So, you know, anybody who knows that this kind of jet is valued like at about 38 million at the time, somewhere near there. And in order to get anything near that, you would have to redeem 7 million Pepsi Points, right?

Mark Vandegrift
Which was about impossible.

Lorraine Kessler
Yeah, that's about impossible. So what happened is this college student, I love it, John Leonard, discovered that you could buy the points directly from Pepsi at 10 cents per point, which is probably something that had to be allowed legally. I don't know if someone else can tell me that. So he produces a check with the help of a millionaire, Tom Hoffman. So he produces a check for $700,000 to Pepsi to buy the jet because he said, "this was an offer, this was an offer." And so it goes to court, and it has to be heard, and this is what our taxpayer dollars are going towards. And the judge, I think her name was Kimba Wood, ruled against Leonard, finding that the ad was not an offer, and that no reasonable person would have believed that they could fly a fighter jet into a school zone. So Pepsi won that case.

Mark Vandegrift
Did he get his $700,000 back?

Lorraine Kessler
I don't think they ever cashed the check. I don't know, but I would imagine they didn't cash the check.

Mark Vandegrift
Well, what seemed crazy almost 30 years ago, guess what? It's back.

Lorraine Kessler
No.

Mark Vandegrift
Yeah, yep, absolutely.

Lorraine Kessler
What, with the fighter jet? Where are they flying it?

Mark Vandegrift
Well, just a second. This company that we're gonna talk about today, and if you're watching or listening to this, you already know where we're going, and that's Liquid Death. Have you heard of Liquid Death?

Lorraine Kessler
Liquid Death? I don't know. Is that a Dr. Kevorkian product or what? I'm here in Michigan. He's from Michigan, right, Kevorkian?

Mark Vandegrift
He is. That was huge when I was at Hillsdale College, which is in Michigan. So I remembered Kevorkian/ Let's not go there. That's a whole-

Lorraine Kessler
And Joe Fiegler, think, is the lawyer, right? The Fiegler Law Firm, who's now the official sponsor of the Tigers.

Mark Vandegrift
Yes. Oh my, we always show our age, Lorraine. Well, let me give you a little background on Liquid Death. And it was funny because when I was teaching over at Grove City College, Dr. Powell brought this up and he was showing a can. I think one of the kids was drinking it or whatever and held it up. A little background on them. The actual company name is Supplying Demand. "Supply-ing" Demand. Okay, not "Supply and Demand", but "Supplying Demand".

Lorraine Kessler
All right. Yeah, Supplying Demand, okay.

Mark Vandegrift
Yeah, it was founded in 2019 by Mike Cessario and it began as a canned water company. So Liquid Death... water. Okay, that's not where you were thinking it was going, right? Well, the idea behind it was that it was created for people in the modern heavy metal, punk rock scene, places where drinking and partying is kind of just a staple of the subculture. Really, that's since, you know, in the 80s when we had metal bands, it was like that. So when everyone else is drinking beer or other things, these were kind of like cool cans that, you know, didn't make it look like, "Oh, I'm not involved in the party." Maybe I was the designated driver or maybe someone's practicing sobriety or whatever it may be. So who wants to just hold this up at a party where heavy metal is going on? Liquid Death, they wanted to offer an alternative to that kind of boring water bottle. So they put it in a metal can and then they named it Liquid Death.

Lorraine Kessler
Well, that's definitely going to grab some headlines, right?

Mark Vandegrift
Yeah. So you don't want to look at the guy, you know, be the guy at the party that's standing at the bar drinking water. They just went ahead and branded it with this heavy metal feeling, and that's been a reflection of what all of their creative, insane marketing campaigns have been. I think probably I haven't seen this crazy of marketing, in terms of its insanity, since Red Bull got a man to jump to earth from outer space. And just in the last five years, they've come out with a whole slew of different flavors from like basic sparkling water to actual flavors. And they're all named after heavy metal punk rock branding. So here's a few of them. "Berry It Alive", spelled B-E-R-R-Y, not "bury" it alive.

Lorraine Kessler
Yeah, but Berry.

Mark Vandegrift
Yeah, Berry It Alive. And "Rest in Peach".

Lorraine Kessler
Well, you got to give them. If we were going to go back to our cult branding, maybe fun applies better than joy in this. And you certainly can't blame them for trying to differentiate. I actually, I was thinking not only of Kevorkian- I can't say that name. What is it?

Mark Vandegrift
"Kevorkian".

Lorraine Kessler
Kevorkian. But there's another, there was a couple of murder trials recently where people were poisoned by putting Visine in water. I didn't know you could kill somebody that way. So I hope they don't come out with that version, you know.

Mark Vandegrift
Yeah, really. Well, maybe it's not our scene, but they have absolutely cornered the market on their own because in March of this year, they received a valuation of $1.4 billion and reported $263 million in sales for 2023.

Lorraine Kessler
Well, a couple of things. One, I mean, it is gimmicky, right? I mean, come on. With a capital 'G'. And I would say this about gimmicks: they work until they don't. So, I mean, there's going to be a point where it might not work any longer. You know, their valuation is impressive. But, you know, I really have two things I would say about it. Because it's so gimmicky and even fun. I would cash in quickly. Like this is sometimes when you want to hit, make your pot of gold, and get out. Or they're going to have to have a long range plan for sustaining this hotness, which I think is very hard if not in an unresolvable paradox, right? Because I mean, no one's hot forever. Hot is a temporary thing and that's kind of what makes hotness hot. So I think this is one if I were the owners of Supplying and Demand I would say when is enough enough? You know, pigs get fat, hogs get slaughtered- and beg out at the right time and cash in. But again, you know, we're just a bunch of talking heads here, so time will tell whether I'm dead wrong or dead, right about Liquid Death.

Mark Vandegrift
Well, I mentioned the fighter jet, right? So in Liquid Death's most recent campaign, they are promising to give away a free L-39 aero jet. And the commercial they made for it, which we'll show on screen, takes direct jabs at the Pepsi case. So the way they're doing this is you buy Liquid Death at any brick and mortar store and text a picture of receipt to their number. Then each individual can that you buy counts as one entry. And you can have up to 400 entries. So the fact that they're giving away an actual fighter jet, it's insane. It falls right in line with their position of "water for partiers". So what do you think about this extreme prize?

Lorraine Kessler
Well, I mean, I guess it's- again, it's attention getting. It's funny that it ties back to the Pepsi thing- and campaign. I don't know. I would like to see who the pilot is of this death net. You know, that's another one of my obsessions is studying plane crashes. So winning a plane comes with some interesting thoughts. I don't know. I mean, I guess that it's, it's, I'll say this about it. Okay. While it does harken back to the Pepsi campaign. does sound like this is a little different. Is this a sweepstakes? Is it a giveaway?

Mark Vandegrift
Yep. It's a sweepstakes. Yep.

Lorraine Kessler
It's still sweep- okay. Well, legally, just so people know listening, legally, a sweepstakes can't involve three things. It can involve consideration- which is purchase- chance, and prize. Otherwise it's a lottery, and other than state lotteries, those are illegal. So somehow they have to, you said you have to have 400...?

Mark Vandegrift
You can have up to 400 entries.

Lorraine Kessler
Yeah, and they're based on purchases?

Mark Vandegrift
Yeah, that's what it says, but I'm sure there's a way around that because you can't have purchase.

Lorraine Kessler
They have to have a- you have to be able to enter without making a purchase. Now, I will say that because otherwise it's not a legal sweepstakes. You can't have consideration and purchase as one of those. So it has to be chance and price. But having said that, most people think that if I haven't bought something somehow, if I've entered any other way, it's not counted, which it has to be legally. But anything could go wrong in a promotion. Anyway, that's just a little technicality on sweepstakes. It's an interesting thing. I don't know what giving a jet away and tying it to Pepsi has to do with Liquid Death, though.

Mark Vandegrift
Well, it's the extreme nature of it, right? So Liquid Death is literally about extremes. I think what we would say in our ways to differentiate, it would be all about hotness. And at some point, probably that's going to wear out because I don't know that the- you have that initial impact of Liquid Death, right? You're like, my goodness, that's kind of extreme. But like most things, the rubber band never goes back to the same size. Isn't that the rule that we talk about?

Lorraine Kessler
Yeah, that's Dick's [Maggiore] favorite thing he talks about.

Mark Vandegrift
So, you know, eventually people are going to hear Liquid Death will be like "meh", then they'll have to get to something more extreme. And then, who knows, maybe they're giving away a trip to the moon by that point. Who knows?

Lorraine Kessler
Well, you know, the great advertiser, Bill Bernbach, who was really a god of our industry, to use that with a lower 'G', always said that getting attention is the first necessary step to differentiation. So you have to get attention. And this is certainly a way. He also said that word of mouth is the best media of all, the best marketing of all. So, they're doing a really good job by being extreme and having these extreme circumstances kind of generate the buzz and just what you're talking about now. So that's good for them.

Mark Vandegrift
Well, let's go back to Pepsi because they haven't had just one issue with the Pepsi points.

Lorraine Kessler
They keep trying.

Mark Vandegrift
Are you familiar with Pepsi Number Fever?

Lorraine Kessler
Again, this is something that Denver, our producer helped- brought to my attention. He said, "hey, you might want to look into this since you're doing a thing on promotions". And so this was the riot producing promotion, right? That was not the intention. And by the way, I am drinking Diet Pepsi. That was not the intention, but that is certainly one of the results of this campaign. So again, it's kind of fun to go over this one. So Denver did provide me some background on this, so I'll ask the indulgence of our listeners and viewers. So apparently- I'm going to read this- apparently in 1992 in the Philippines, Pepsi printed numbers ranging from 001 to 999 inside the caps of its products. And it wasn't just Pepsi, but it was the PepsiCo lineup, which included Pepsi Cola, 7-Up, Mountain Dew, and one called Mirinda, which I never heard of before, so thank you, Denver. A Spanish fruit-flavored soda. Here's something that's really cool about this promotion is that it had this constancy, right? Because a winning number would be announced every night on the evening news. I mean, that's genius. That's just genius. The prizes were supposed to be between a hundred pesos to a million pesos, which, you know, at the time of this, and this was like 1992, was more than 600 times the average monthly salary in the Philippines. So quite a bit of money. And it was effective as heck. I mean, sales climbed 4 million. In fact, it was so successful that Pepsi said, "hey, let's continue this for five years," which is what they did.

Mark Vandegrift
Five weeks.

Lorraine Kessler
I'm sorry, five weeks, which is what they did. And this is where things went wildly wrong, 800,000 times wrong. Because in May 25th, 1992, the winning grand prize number was 349. Okay. But because of the extension, Pepsi accidentally printed 800,000 caps with the winning number. So just think about 800,000 winners. I mean, the value is 800 billion pesos, which is 32 billion in US. You could be Elon Musk. And then Pepsi said, "no, no, no, no, we're going to recall this promotion". And they offered the winners the 800,000 like 500 pesos for each one instead of the million dollar peso price, so- or whatever million dollar price per winner. And that resulted in protests, boycotts. There were people overturning trucks. There was conspiracy theories. There were death threats. And not funny, there were actually the death of five civilians through this because it became so fraught with violence and just upset. So, of course, Pepsi was then sued and they had a total of 5,200 criminal complaints, near 700 civil lawsuits. And this is what I can't believe. So I'm going to go back to the conspiracy theory part of this, because Pepsi fought the lawsuits saying it was a machine error and they were not liable. Well, who would be liable?

Mark Vandegrift
The machine.

Lorraine Kessler
Like the machine. So AI.

Mark Vandegrift
Yeah, AI in 1992.

Lorraine Kessler
And the court cases lasted until 2006 until finally the Philippine Supreme Court ruled that Pepsi was not liable. Now that sounds fishy to me. I don't know about to you. I don't know who's on the Supreme Court. I don't know what they walked away with, but I think it's probably more than $183 per person that Pepsi paid some. So I'd like to know who's on that Supreme Court and where they live now. Crazy.

Mark Vandegrift
Well, the promotion itself was pretty basic at the time. but I think the end results will put it in the Advertising Hall of Fame, as well as the Bad PR Hall of Fame. I don't think I could name another ad or promotional campaign that had real world consequences to this degree. I mean, think about it. What do you- give me a sense on your part if you've ever seen something-

Lorraine Kessler
Well, in terms of scope, they're really lucky it was the Philippines, right? And they didn't do this worldwide or even just in the US, because it would have been so much worse. But one that I just enjoy reading- well, there was a documentary on this- and a lot of people might remember this, but there was the McDonald's, very popular Monopoly promotions, which have gone on for years and in fact have continued even after this lawsuit. But they started in 1987 and then they were rolled out internationally, this Monopoly promotion, and it had different, many different theme names over the years. There was the "Monopoly Millionaire Game", the Monopoly... "Money Monopoly", etc. So in each tier of prizes- and kind of what was being done changed- but the basic thing was it looked like a monopoly board. You remember that you man they had the little guy who looks like my husband, the Community Chest guy. He says- John gets older, I say, "you're a lot like that Community Chest guy." But you had the tokens and you could get them out of the newspaper or you could go when you bought food at McDonald's, you could get these tokens and they could be redeemed for either free food like french fries and kind of low-level couple chicken nuggets or something, Or they could go for goods, it could be cars, could be gold, diamonds. And then in the early years, a grand prize of a million was awarded to one person who acquired the tokens to Park Place and Boardwalk. Like you had to get those tokens. So, you know, it was kind of cool and a lot of- great tie-in. But between 1989 and 2001, there was $24 million worth of fraud, which the FBI had to finally be brought in on to explore. And if anybody wants to watch the documentary, which is- I think it's five episodes, It's amazingly entertaining with the FBI agents talking about this case and some of the real, the people involved in it. It's called McMillions. So tune in for that. So, what happened is, McDonald's in putting this together, the laws generally forbid a company from administering its own contests. So to ensure all prizes are given away, actually given away, promotions are handled by an impartial third party company, and this company was Simon Worldwide. And so that's who they had handle this. Well, it turns out that the guy who was in head of security for Simon Worldwide, he was supposed to go around with the suitcases with the winning tickets. There was a guy named Jerome Jerry Jacobson, who was known as "Uncle Jerry". And he was a former cop.

Mark Vandegrift
Oh geez. That's my first tip.

Lorraine Kessler
He was a former cop, and he stole the most valuable game pieces because it was revealed to him which ones were the winners, which he should not have. And at first he gave them to friends and families. But then he ran in- this is, this is unbelievable, this is why you can't make this up- he ran in, on a flight in Atlanta, He ran into a guy named Gennaro "Jerry" Colombo. Yes, part of the Colombo crime family, although real low down and, chance meeting in the Atlanta airport and he recruited Colombo to buy the tickets, right, and to act and to exchange, actually have other people, he recruited other people to cash in the prizes and they would get a certain amount off the top. And then Gennaro and Uncle Jerry, or Colombo and Uncle Jerry, would keep the rest. So that's the scam that was going on. So this thing got wider and wider because they started realizing a lot of family related to this Colombo were winning these prizes all the time. And so that's kind of what happened. Anyway, $24 million later, ended up 53 people were indicted, not only uncle Jerry and Colombo and some of the family, and almost all of them pled guilty. Now, if you haven't heard of this particular scam or promotion that went wrong, It's because the day the trial began for these people was September 10th, 2001. And the next day was 9-11. So, and I'm sure McDonald's was like [whew]. But no, it was at the expense of- great expense of many lives, so I don't mean to make fun about that or light about it, but that's a pretty fun one to check out.

Mark Vandegrift
That's good. Cool. Well, on the positive side of things, let's go back to Liquid Death. They ran one promotion where they auctioned off on eBay, of all places, ad space on the tops and bottoms of their packaging on 500,000 cases of Liquid Death, claiming that it will reach more people than the Super Bowl. Coinbase ended up winning the auction for $500,114. Isn't that cool? Yeah. Remember Coinbase? We talked about they were the ones with QR code in the Super Bowl. It's kind of ironic that they said this would reach more people than the Super Bowl. So that was their, I guess, coming back to relevance for a little bit of time. Over time, Liquid Death has partnered with anyone you can think of when it comes to the crazy extreme side of things. Ozzy Osbourne in a campaign for their powdered electrolyte mix called "Death Dust".

Lorraine Kessler
All this death, man.

Mark Vandegrift
Yeah, I'll let you guess who this was. This person collaborated with Liquid Death to make 100 skateboards infused with his blood. Tony Hawk.

Lorraine Kessler
Don't know him. Don't know him. No.

Mark Vandegrift
Don't know? Okay. Tony Hawk's like the all-time skateboarder. Okay. Martha Stewart helped them make candles in the shape of severed hands.

Lorraine Kessler
All to sell water, right?

Mark Vandegrift
So yeah, all because it's water. I guess the markup in water must be really good. But if you look at any number of Liquid Death's promotions, even just their basic advertisements, they're weird, creative, insane. You and I would probably say they're borderline offensive. Well, I would. I don't know if you would. But they seem to be working well for the brand. The reason why I think it works so well is there are some good ideas here, right? They're doing the right personalities with the right people. And it falls in line with their position, which is kind of "water for cool people" or "water for metal fans or water for punk rockers and skaters".

Lorraine Kessler
Yeah. But it's also a contrasting that, you know, water is a living part of life, right? It's like, okay, know, talk about nonconformist, you know. Yeah.

Mark Vandegrift
Yeah. Well, we could go on with all that they've done. I think they've done a really, really good job with it. You know, again, $1.4 billion valuation for a water company. They're doing something right.

Lorraine Kessler
Yeah, but I don't put too much stock in valuations, right? Because big investors can make big, big mistakes. I mean, we've just had examples of WeWork, that unicorn that went to $47 billion, and he tried to make WeWork so amazingly different. It's just an office rental space, okay? Right? And then Theranos, remember the healthcare company that raised $700 million in investment capital and was valued at $10 billion and know Elizabeth Holmes and her technology were found to be frauds. So she's now serving 11 years in prison. So I mean, I think they're rising in a feverish pace. Good for them. They're having a lot of fun with the branding and people are responding, and I don't wish them anything but continued success, but I think they have, as I said, they have two courses: either going to have to cash out at the right time, like be smart about it, and or find some way to sustain this long term, because it just seems like it's almost too hot and too manufactured to just keep going on its own energy. But I do know there's two things you can learn from this example that we could pass on to our viewers and listeners. One is pouring it on, making hay while the sun shines with a differentiated idea and bleed it, like bleed it to death, right, and- pun intended. And then two, making it fun and interesting, certainly media grabbing because dull advertising is death too, pun intended.

Mark Vandegrift
Pun intended. Well, you know, if they are on the hotness side of differentiating, then you know, I don't think there's, it's going to be hard to top a fighter jet. So, you know, the question of hot is you're clear up here, how fast do you go like that?

Lorraine Kessler
Unless they want to sponsor Titan II, the submarine.

Mark Vandegrift
Okay, Lorraine, that might be too edgy for all the listeners that actually picked up on that.

Lorraine Kessler
I don't think so.

Mark Vandegrift
Well, I guess strange gets press, right? And press creates word of mouth.

Lorraine Kessler
Extreme distress, right?

Mark Vandegrift
Anyhow, well, Lorraine, I think we should just end it right there. That's a good way to kill-

Lorraine Kessler
Yes, I hope Denver keeps that in.

Mark Vandegrift
I think that's a good way to kill our podcast today.

Lorraine Kessler
Yeah, that's right.

Mark Vandegrift
But thank you for all those who joined us today. And if you haven't liked, shared, subscribed,or told your friends about the Brand Shorthand podcast, please do. And until next time, have an amazing day.