The Pepsi Challenge

Why it works

The ad as a live experiment. In 1975 Pepsi trailed Coca-Cola three to one in Dallas, so it stopped asserting and started testing: Coke drinkers sipped from two unlabelled glasses and said which they preferred, and Pepsi turned the results — more than half choosing Pepsi — into local advertising. Within a year Coke's Dallas lead had narrowed to two to one, and the challenge spread to Michigan, Los Angeles and New York before going national. Coke's counter-attack became part of the legend: it argued that people simply preferred the letter M on Pepsi's glass to the Q on its own, so Pepsi switched letters and kept winning. It is studied as the purest form of demonstration advertising — the audience runs the test, on camera — and for its long tail: sweeter drinks tend to win single sips, and the challenge pushed Coca-Cola into the formula research that ended in New Coke. Pepsi revived the challenge for its 50th anniversary.