As the man responsible for taking Pepsi out of the Super Bowl in favor of devoting $20 million this year to the Pepsi Refresh Project—a consumer-powered social media/grassroots cause mash-up—Frank Cooper III is not afraid of stirring the pot.

As senior vice president/chief consumer engagement officer of PepsiCo Inc.’s PepsiCo Americas Beverages unit, Cooper will have further chances to do so as the company works to incorporate its newly acquired bottling operations, seeks stability in its marketing efforts across its beverage portfolio and continues to do battle with the big red machine from Atlanta.

Officially, Cooper is charged with leading the development of a new consumer engagement model for PAB and creating breakthrough marketing programs across its portfolio. In addition, he has direct oversight of key operational areas that comprise consumer engagement, including digital, media, sports, multicultural and entertainment.

IEG SR checked in with him last week for an update on Pepsi’s marketing priorities and where he sees marketing and sponsorship heading in the next few years.

IEG SR: Two months in, how is Pepsi Refresh working for you? Are you still comfortable that the change in strategy from advertising on the Super Bowl to putting resources behind Pepsi Refresh was the right call?

Cooper: We are ecstatic about Pepsi Refresh on two fronts. One is that we see it as pointing the way to the future of marketing: engaging consumers in meaningful brand experiences by connecting our brand values with the cultural value of our consumers.

That is a pretty big step for a company like Pepsi. We were one of the leaders in generational marketing; we established the phrase The Pepsi Generation. We were one of the leaders in image-based marketing with celebrity campaigns starting with Michael Jackson and going through Ray Charles, Lionel Richie, Madonna, Robert Palmer, etc.

We feel we are now in an era where a much deeper connection needs to be established between the brand and the consumer; a connection based on shared values. Pepsi Refresh reflects that.

We are doing it at a fairly high level, but we think people—and our consumers in particular—want to give back and they want to do it in a way that is more personal. Pepsi Refresh sets up a platform for a do-it-yourself type of philanthropy.

Secondly, when we pulled out of the Super Bowl, we saw people lose their minds over our decision! Some of our consumers did, some of our bottlers did and the media was definitely intrigued by it.

In the end, we feel we won big time in making that move. It was not in any way meant to condemn advertising on the Super Bowl—that will remain a powerful platform; any time you have something with 100 million viewers at one time, it can be a powerful platform.

But for us it paid out in the earned media that we received around going in a different direction. The numbers that we are seeing indicate we outpaced not only our competitors, but most advertisers in terms of earned media, and if you added those impression versus the impressions that others got from the Super Bowl we think we won in that respect.

I think we won because Pepsi Refresh is true to what we are trying to do. This type of platform, we believe, is a more bottom-up approach to identifying those types of individuals who are passionate about a project and then motivating and empowering them and letting it grow from there.

We are getting great traffic, great submissions. We limit submissions each month to 1,000. In the first round, it took 16 hours for us to reach 1,000; in the second round it took 14 minutes. So we may have to raise the limit because of the enthusiasm around it. Overall, it has been really tremendous and we are very happy with the start of the Pepsi Refresh project.

IEG SR: From what we have seen, it seems that Pepsi Refresh is more engaging to women then men. Is that what you are seeing?

Cooper: We are seeing more women than men who are active on the site right now and I’m not sure why, but it is not so disproportionate that we are alarmed by it.

For us, we embrace it in many respects because if you look at shoppers, particularly in large format retail—in grocery and mass—it is a predominantly female shopper, at least in making the key decision. So for us, it is an important connection, and we actually like to see the bias in that way.

IEG SR: You mentioned connecting brand values to cultural values. How do you define Pepsi’s brand values when so much of what you are doing is letting the consumer decide? Is your brand value about being an enabler? Or is it something you are standing for?

Cooper: We characterize it in a number of different ways. We talk about a sense of optimism and active participation and moving the world forward. Those are our fundamental values.

If you look at a very high level at Coke vs. Pepsi, I think Coke is great at looking at where we have been and what we have achieved, and celebrating all of that in a really wonderful way. We tend to be more forward-looking and focus on the potential that exists in people and the hope and belief about the future.

I think we are now trying to bring that to light. We are not just talking about it, or putting symbols out there about it, but making something happen so people have a greater opportunity to fill their own potential, whether that is giving back, whether that is music, etc.

It’s helping people; it’s directly adding value to people’s lives. That is really the shift we are making. It’s such a fundamental shift in our way of thinking that we are still working on crystallizing the set of values and understanding what our customers want. This is a good start, but also something that will continue to evolve.

IEG SR: Is your consumer still the youth market, or is it expanding?

Cooper: The interesting thing about our consumer base is that it never has been totally youth. Even now, we have a significant consumer base that is Boomer, a significant consumer base that is Gen X.

The focus has always been in part on youth because 1) Pepsi is forward-looking and 2) there is always this need to bring in the next generation of consumers so that you have a viable franchise and brand.

What’s interesting about when you shift from a demographic focus or a psychographic focus and you move to values, you start to see things cross these lines. There are large groups of millenials interested in the environment, as well as Gen Xers and Boomers, so it becomes a really interesting way of crossing those boundaries of traditional demographics, as well as race, ethnicity and geography.

So that is the next shift, and it frees us of that dichotomy between the young vs. the old.

IEG SR: We have heard your colleagues at Pepsi say similar things about music and action sports, as well. It’s less about ethnicity and more about what are consumers passionate about and what are they connecting to.

Cooper: Absolutely. Take a brand like Mountain Dew and its strong association with action sports. What is most interesting about Mountain Dew is that it’s not so much about the latest trick, but it’s really about the spirit of the sport and the culture.

That’s what we have embraced. That’s what makes us an authentic player in it. It even goes into areas like multicultural marketing. What we are seeing is people identifying themselves much less by race, ethnicity and geographic location, and more and more by cultural values.

The Internet has helped that quite a bit, because when you set up a social network on a digital platform you can connect with like-minded people across geographic boundaries. That’s what has unleashed a lot of this, but it is not the sole thing that is making that happen.

We have done surveys around it and we feel confident that the way people self-identify has shifted in a fundamental way, and it will force any brand that wants to add value to people’s lives to shift the way it interacts with consumers.

IEG SR: That’s an interesting observation in light of what transpired around the Sprite Step Off recently.

Cooper: Yes. If you go back maybe four or five years ago, step shows became mainstream. There were movies and TV shows about step. The Army sponsored step shows. So when a Caucasian group wins a competition in what has been something predominantly for black sororities and fraternities, I think that’s proof that it’s about the values, the lifestyle and the culture, more so than it is about race and ethnicity.

IEG SR: But this case ran into the culture that it grew out of saying, “Wait a minute, this is ours…” That brings us back to the idea of consumer empowerment and how brands now have to anticipate all kinds of issues that can arise when they cede some control to consumers.

Cooper: We’re talking about large scale movements, but there will be outliers who think in a very traditional way. We know, for example, there are a lot of consumers who focus on their geographic location or their ethnicity as their center of gravity and that’s not going to change for that set of consumers.

What we’re really focusing on is: Where is the momentum heading, and if you look forward to 2015 or further, where do we think the vast majority of people will be? We are in that transition period now and there is definitely going to be tension, but it’s inevitable that you are going to run up against that tension.

IEG SR: Is it really how you respond that’s the issue, rather than how you avoid controversy?

Cooper: It’s how you respond—and this is difficult for any large company—but it comes down to the brands taking a stand behind who they are and saying, “We are not for everyone.” It doesn’t mean you have to be aggressively polarizing, but you can never be for everyone.

Businesspeople say it all the time: “We know one-size-fits-all isn’t the way to go; we know we shouldn’t try to be everything to everybody,” but when a call comes in, you see companies and brands fold all the time.

IEG SR: What do you say to grassroots organizations and properties that are asking, “What does all this mean to me?” We see research that says consumers connect better with local initiatives, but how do those typically smaller organizations deliver scale? Is there a future for them with a company like Pepsi?

Cooper: If you look at Pepsi Refresh, the next wave of it is all about local.

Fortunately for us, our organization is a local organization; we operate through our bottling system and our real presence comes to life on the ground through the bottlers in their local territories. We have given out grants to the bottlers that they will disseminate on a local basis.

Secondly, I would say small is the new big, in a way. In the U.S. we are looking at local market opportunities and crafting specific opportunities for at least regions, and in some cases going down to states and sometimes even to metropolitan areas.

We think that is the future. It is similar to the way international marketing typically works—you have a headquarters that will offer up some assets and will put together some broad campaigns, but each of the regions in the world will start to tailor their own ideas, some based off of those assets and some from their own understanding of the cultural nuances in their region.

In the US we are seeing that happen more and more, and we think that is going to be necessary. Our marketing in Texas is going to feel a lot different than if you are in the Pacific Northwest.

IEG SR: Should traditional properties such as cause, entertainment and sports organizations, be concerned about programs like Pepsi Refresh, Chase Community Giving and others, which can viewed as cutting out the middleman in terms of linking brands and consumers directly around passion points, rather than the traditional model of the sponsor borrowing the loyalty, imagery and imprimatur of the property to build a relationship with the consumer?

Cooper: They should not be concerned because the monies we are talking about for Pepsi Refresh are incremental dollars. These are dollars that would otherwise be put into commercial campaigns, but which we are handing over to consumers.

That’s the first thing—if they were getting money from the foundation before or from other parts of corporations, that still exists and the process for getting those dollars remains the same. The second thing is the most innovative NGOs will look at this as an opportunity to participate in a different way.

The main shift in the Pepsi Refresh project is that it’s project based. It doesn’t exclude an NGO from coming in and participating, but you have to come in with a specific idea, not with a broad mission.

You can’t come in and say, ”I’m here to advance environmental sustainability.” But if you come and say, “In this community we want to transform these vacant parking lots into green spaces where the community can gather and kids can play,” that’s a viable idea and anyone can submit that idea—an individual or an NGO—they are on equal footing and it becomes very democratic in that a large group of people have to believe in that idea in order for it to get funded.

IEG SR: On the sports and entertainment front, going forward do you see changes in Pepsi’s approach to working with current partners like MLB and other current and prospective sponsored properties nationally and locally?

Cooper: The biggest change that I’m seeing—and it’s not just us—is that sponsors actually want to add value to the fan experience now.

Before it was much more of an approach of: “How can I disrupt the experience so that the audience can notice me, the brand? Should I send a blimp flying over the stadium? Should I send somebody running down the sidelines with a billboard? I need something to disrupt you so that you can see I’m part of making this happen in this football or baseball stadium.”

Where it’s heading now is: “How can I make your experience much more engaging and memorable?” I think that’s the next phase that we are all going through and it’s a strategic and a creative challenge for every company that remains in that space.