The Computer Error That Led to a Country Declaring War on Pepsi

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iStock

On May 25, 1992, the Channel 2 News program in Manila, Philippines aired a segment that had been running since February of that year. Each night, the station alerted viewers to the day’s winning number in Pepsi’s Number Fever promotion. Buying a specially marked Pepsi product allowed consumers to match the number underneath the bottle cap to the announcements. While most prizes were just 100 pesos (roughly $5 in today’s U.S. currency), there was an opportunity to win the grand prize of one million pesos, or the equivalent of $37,000 to $40,000.

The Philippines was a country struggling with a modest economy and widespread poverty, and that grand prize was perceived as a life-changing amount of money. So when 349, that night's winning number, flashed on screen that night, tens of thousands of Filipinos couldn’t believe their luck. The number was associated with the largest prize in the sweepstakes. The next morning, Pepsi plants in Manila were overrun by people toting their 349-emblazoned bottle caps and looking for the promised reward.

There wasn’t one.

Only two of the grand prizes were supposed to have been doled out. Instead, Pepsi had somehow manufactured 800,000 caps with the winning number. Consumers were told the company had made an error and were turned away in droves. Barbed wire was erected around the plants. Riots, boycotts, and picketing ensued. Homemade bombs were launched at bottling factories. In the words of one Pepsi executive, “we had death threats for breakfast.”

The giveaway was intended to boost sales. Instead, Pepsi executives were not only bleeding market share—they were suddenly in fear for their lives.

 

As the perennial number two in the cola industry, Pepsi had engaged in several promotional attempts over the years to compete with rival Coca-Cola. In 1989, they marketed Pepsi A.M. as an alternative to coffee. (It had 28 percent more caffeine than regular Pepsi.) The product didn’t catch on, nor did the company’s expensive attempt to recruit pop star Madonna that same year. Stung by controversy over her religious-themed “Like a Prayer” video, the company pulled advertising featuring the singer despite having paid her $5 million for the endorsement.

Their Number Fever campaign didn’t appear to carry the same risks. Pepsi saw only upside: In the Philippines, then the world's 12th largest market for soft drinks, the company was a distant second to Coca-Cola. The promise of winning anything from a modest amount of money to 1 million pesos was enough to spike sales 40 percent, capturing 26 percent of the country’s market share. From February to May, 51,000 people had won 100 pesos, while 17 had captured the grand prize.

To determine winning numbers, Pepsi recruited D.G. Consultores, a marketing firm based in Mexico. The numbers were generated via computer, then secured in a safe deposit box in Manila. From there, the list would be used to “seed” bottle caps in the bottling plants. Each night, the company would announce the day’s winning number on television.

A Pepsi bottlecap is pictured against a blue background
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Somehow, that system went awry. A computer glitch told bottlers to print 800,000 caps with the 349 designation, although all of them except for two lacked a special security code that proved the cap was authentic. That detail was irrelevant to consumers, who saw that they had the number and proceeded to demand the prize they felt was owed to them—a number that eventually grew to 486,170 people. (Though more caps were printed, not everyone noticed they held a “winning” number.)

Quickly, Pepsi executives in the Philippines and stateside convened for an emergency meeting at 3 a.m. on how to proceed. Economically, honoring the perceived value of all of the caps was virtually impossible to justify—it would’ve cost the company tens of billions of dollars. Instead, they opted to declare it a computer error and offered $18 to $20 to cap holders as a “goodwill gesture.” What was originally earmarked to be a promotion with $2 million in total prizes ballooned to $10 million.

While some accepted the prize, most consumers were livid. Pepsi, they argued, had raised the hope of lessening their financial burdens. They didn’t care about a clerical mistake. Pepsi was a massive conglomerate and should accept fault.

The company disagreed, and that's when the trouble began.

 

Pepsi delivery trucks became an early and frequent casualty of the war on the soft drink manufacturer. Between 32 and 37 trucks were overturned, burned, stoned, or otherwise vandalized by protestors, many of whom took to the streets with signs and bullhorns to voice their displeasure over the company's wrongdoing. Corporate Pepsi offices were targeted by Molotov cocktails, makeshift explosives that crashed into windows and front lawns. One homemade grenade intended for a truck kept rolling and landed near a schoolteacher, killing her and a 5-year-old student and wounding six others.

Fretful Pepsi executives hired bodyguards, armed passengers in delivery trucks, and pulled expatriates from the country, leaving just a handful—including one with experience in Beirut—to face the angry mobs, which were quickly becoming organized. Several spun off into factions, including Coalition 349, which took a systematic approach to shaming Pepsi into paying up. After electing a leader, Vicente del Fierro Jr., they printed anti-Pepsi tracts and called for product boycotts. Paciencia Salem, a then-64-year-old protestor whose husband died of heart failure while marching in opposition, declared that the company would never see relief.

“Even if I die here, my ghost will come to fight Pepsi,” she said. “It is their mistake. Not our mistake. And now they won’t pay. That’s why we are fighting.”

Protestors voice anti-Pepsi sentiment during a rally in Manila
Romeo Gacad, AFP/Getty Images

Though Pepsi was reticent to respond to these impassioned revolts, calling it “extortion,” they were compelled to answer questions from the Philippines government. Senator Gloria Macapagal Arroyo called the mistake “negligent,” while thousands of civil and criminal complaints flooded state prosecutor offices. A crop of “speculators” even offered to buy the caps for $15, betting that the company might one day relent and agree to pay the full prize amount.

The tumult stretched well into 1993, at which point a sensational new twist captured local headlines. In December of that year, a police officer filed a report alleging that the bombings and riots were not the result of protestors. They were, he insisted, deliberate acts of self-sabotage by Pepsi against itself.

The accusation, which was reported in the Chicago Tribune, came from Artemio Sacaguing, chief of the organized crime division of the country’s National Bureau of Investigation. In his brief, Sacaguing reported to Manila prosecutors that a man had confessed to being a Pepsi security guard and knew of three mercenaries who were hired by the company to damage their property. In doing so, Sacaguing claimed, they could portray the anti-Pepsi groups as being violent and labeled as terrorists, harming their position in court.

Almost immediately, Sacaguing’s superiors dismissed his accusations and stated that the official’s report had already been discredited. A Pepsi lawyer refuted the allegation; Senator Macapagal Arroyo floated a slightly more plausible theory. Rival bottlers, she said, were acting out in order to weaken Pepsi’s grip on the market.

 

Slowly, Pepsi’s black eye in Manila began to fade. Most of the civil suits (689) and criminal complaints (5200) were tossed out of court. Sensing that the company had more determination to remain in the country than protestors had the time or energy to continue marching, the anti-Pepsi sentiment began to dim. By 1994, their market share had rebounded from a low of 17 percent post-scandal to 21 percent. A 1.5 liter “mega bottle” was a brisk seller.

In 2006, a Philippines Supreme Court ruling closed the book on the outstanding court cases and potential liability, finding that Pepsi was not obligated to honor the sweepstakes payout due to the error. It was a prolonged, if satisfactory, conclusion to the controversy.

Soda companies continue to perpetuate giveaways as a method for raising awareness, though there’s always risk that consumers want to push the envelope. In 1996, Pepsi offered prizes for people who collected points based on product purchases. One ad facetiously offered a Harrier fighter jet to anyone who submitted 7 million points. John Leonard, a 21-year-old business major, decided to take the company up on their offer to buy points for $.10 each. After raising $700,000, he demanded his jet, but Pepsi declared the prize offering was just a joke. A court agreed, granting summary judgment to the soda company. In future airings of the ad, they increased the number of points needed from 7 million to 700 million.

When Bloodthirsty Batman Readers Voted to Kill Off Robin

DC Comics
DC Comics

Denny O’Neil kept thinking about Larry the Lobster. O’Neil, who served as the group editor of the Batman family of comic book titles for DC Comics in the 1980s, was at a writer’s retreat in upstate New York in 1988 when he and other staffers began discussing the best way to address growing reader dissent with the current incarnation of Robin. Batman’s newest sidekick—a street urchin named Jason Todd—was sullen and moody, a sharp contrast to the gleeful energy of former ward Dick Grayson. Fans called him whiny and petulant. Measures needed to be taken.

During the conversation, O’Neil suddenly remembered a 1982 skit from Saturday Night Live in which cast member Eddie Murphy threatened to boil a lobster named Larry on air unless viewers phoned in and begged for clemency. Or, Murphy told them, they could dial a separate 900 number to cast a vote for his death. The following week, Murphy announced the lobster had earned a stay of execution. He ate it anyway.

O’Neil wondered if the same gimmick could be applied to comics. If fans hated Robin so much, O’Neil thought, then perhaps they should feel culpable for killing him.

 

Death in comics was nothing new. Saddled with decades of continuity and running the risk of repeating themselves, comics writers often turn to tragedy to shake up the status quo. Comic book covers of the 1950s—the clickbait of their time—often hinted at a demise inside, though it was usually a case of misdirection. In 1973, Marvel allowed Spider-Man’s girlfriend, Gwen Stacy, to plummet to her death during a scuffle with the Green Goblin. (In the next issue, the Goblin, a.k.a. Norman Osborn, met his maker.) In the 1980s, one iteration of Captain Marvel succumbed to that most human of weaknesses: cancer.

DC had enlisted the Grim Reaper, too, killing off the Flash and Supergirl during their 1986 Crisis on Infinite Earths crossover that attempted to sort out the publisher’s confusing timelines.

It was the clean slate of Crisis on Infinite Earths that allowed O’Neil to improve upon Jason Todd’s origin story. Originally introduced in Batman #357 (1983) as a trapeze artist whose parents fell to their death, Todd’s background was a virtual carbon copy of Dick Grayson’s, who had first appeared as Robin back in 1940. After more than 40 years as the Dark Knight's sidekick, Grayson came into his own and adopted the mantle of Nightwing, another player in the DC Universe. Which left a spot open for a new Robin. Enter Todd who, under O'Neil's supervision, was first discovered trying to liberate a wheel from the Batmobile. Impressed with the kid’s courage, Batman enlisted him to bust a child crime ring. After a bit of superhero training, he became an official costumed sidekick. 

Batman holds an injured Robin in a DC Comics illustration by Jim Aparo
DC Comics

Jim Starlin, who had recently come on board as writer for the main Batman title—and who had killed off Captain Marvel for Marvel—had never particularly liked any version of Robin; he preferred to depict Batman as a troubled loner. While Starlin had advocated for Robin’s demise as far back as 1984, this latest iteration was especially grating to him, as Todd often ignored orders and brooded incessantly. When DC floated the idea of having one of their characters contract HIV, it was Starlin who repeatedly suggested giving Robin the virus.

The publisher didn’t go for that, but O’Neil’s idea to have readers cast their own votes gained momentum within the company. Starlin needed no convincing and wove a four-issue plot, “Death in the Family,” in which Todd discovers his biological mother is alive and working in Ethiopia. He travels to see her, but realizes she has been recruited by the Joker to sell stolen medical supplies. Todd's only choice is to confront the iconic villain—a showdown that sees him beaten nearly to death with a crowbar and left to die in an explosion.

An ad at the conclusion of the issue breathlessly told readers that Robin’s ultimate fate was in their hands. “Robin will die because the Joker wants revenge, but you can prevent it with a telephone call,” it read. Dialing one 900 number cast a vote for his survival; dialing another would help seal his doom. Each call cost 50 cents.

The lines were only open for a 36-hour period on September 16 and 17, 1988. Approximately 10,614 calls were received. Of those, 5271 backed a second chance, while 5343 threw dirt on Todd’s face. Robin would die, executed by a margin of just 72 votes—though that may not have represented 72 people. At least one anti-Robin activist admitted to calling in four times to cement the sidekick's death.

In Batman #428, which hit stands that October, the Dark Knight finds a bloodied Todd in the rubble. (Two endings had been prepared by Starlin and artist Jim Aparo; the winning conclusion was the one rushed to press.) To make matters worse, Batman discovers that the Joker has been named an ambassador to the United Nations by the Ayatollah Khomeini and now has diplomatic immunity.

Starlin got his wish. So did the majority of fans. But DC wasn’t prepared for what happened next.

 

With the mainstream media not quite hip to the fact that death is often not a permanent condition in comics, hundreds of headlines that fall ran with the news that Batman’s perennial sidekick had perished. “Holy Hearse, Batman!” read the Arizona Daily Star. Press calls flooded into DC’s offices. O’Neil gave interviews for three days straight, and was eventually cut off by a concerned DC public relations employee who feared that all the attention was reflecting poorly on the company.

For most of the public, the “Robin’s Dead” notices were scanned without much regard for which Robin died—it was the aloof Todd who had met his maker, not the beloved Dick Grayson. DC’s marketing arm was jolted, as thousands of lunchboxes, shirts, and toys were now doubling as memorials for Batman's deceased sidekick. (For better or worse, Robin was not a part of Tim Burton’s Batman, which was set to arrive in theaters just seven months later.) Starlin later said, perhaps only half-jokingly, that O’Neil took credit for the idea until executives grew annoyed, at which point Starlin became the man who killed the Boy Wonder.

Batman stands in front of the Bat symbol in this book collection illustration
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Batman #428 and the other connected issues sold out, with the issues going for $20 to $40 apiece in the collector’s aftermarket. DC would later use the death trope to even greater effect with their 1993 “Death of Superman” saga, selling millions of copies, some of them bagged with a black armband for proper mourning.

Superman returned, of course. So did Todd. He was later revealed as the Red Hood, a Batman nemesis who is slated to appear on the DC Universe streaming series Titans alongside original Robin Dick Grayson. Still, Todd's death seemed to teach O’Neil a lesson about the enduring appeal of comic mythology and the responsibility that goes along with it.

“It changed my mind about what I did for a living,” O'Neil said. “I realized that, no, I am in charge of post-modern folklore. These characters have been around so long and so ubiquitously that they are our modern equivalent of Paul Bunyan and mythic figures of earlier ages.”

Just because it was O'Neil's idea to let fans decide Robin's fate doesn't mean he was in favor of his demise. During the brief window the phone lines were open, O’Neil picked up his phone. He dialed the 900 number in support of saving him.

Ad Astra: The Time Earth Almost Got a Space Billboard

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iStock

In the 1980s and well into the 1990s, everything associated with Arnold Schwarzenegger was big. Big biceps (22 inches during his bodybuilding heyday). Big box office (1991's Terminator 2: Judgment Day made $520 million worldwide, the highest-grossing movie of that year). So it was no surprise to open a newspaper in 1993 and see that Columbia Pictures was spending $500,000 to plaster the actor's name and the title of his pending summer blockbuster, Last Action Hero, on the fuselage of a NASA rocket set for launch that June. Schwarzenegger himself was scheduled to push the button that would propel the spacecraft into orbit.

The NASA project deal was being brokered for commercial advertising purposes by Space Marketing Inc., an Atlanta-based firm specializing in sponsorships and ads located outside of the atmosphere. The company's CEO, Mike Lawson, told the Los Angeles Times that he could've sold "dozens" of ads for the rocket, but that he and NASA officials didn't want it to "look like a pace car at the Indy 500."

The idea of promoting a movie in space was brazen, but not nearly as much as another, more ambitious project that Lawson was planning. If everything went according to plan, his Space Marketing would shoot a payload into space in time for the 1996 Summer Olympic Games in Atlanta. Once it was in orbit, mylar tubes would inflate with gas and spring open to support a mile-wide, quarter-mile tall reflective sheet that would be visible from Earth. Lawson called it an "inflatable platform," but the press—and critics—quickly labeled it something else: a space billboard.

If Lawson had his way, it would be able to make everything from the Olympic rings to the McDonald's logo as visible to Earthbound consumers as a full moon.

 

In Robert Heinlein's 1950 novella The Man Who Sold the Moon, a lunar entrepreneur hustles to sell advertising space on the moon as part of his attempt to make colonization a profitable venture. Lawson—a onetime director of marketing for his father's publishing company in Atlanta and a fan of science fiction—read the story. In 1988, he founded Space Marketing as a way to defictionalize the concept.

As fantastic as it sounded, the idea wasn't without precedent. In 1981, telecommunications mogul Robert Lorsch made a presentation to Congress that outlined a strategy for allowing corporations to "sponsor" space travel by letting them buy plaques that would go onboard spacecraft. In the same way they endorsed the Olympics, Lorsch said, corporate America could help subsidize space travel.

A McDonald's logo is visible from space
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The plan was a response to then-president Ronald Reagan's plea to have the private sector assist in helping the government overcome their financial burdens. While Lorsch's proposal was prescient—it anticipated the rise of privatized space exploration—the idea of having commercial sponsors for NASA didn't make it through the Byzantine maze of Washington bureaucracy.

Lawson thought the idea could be taken further, and not necessarily with the cooperation of government. Partnering with scientists at the Lawrence Livermore National Library and the University of Colorado, Lawson developed a plan to allow instruments developed by these institutions to go into orbit and collect information about the ozone layer. To underwrite the project, he would solicit commercial advertisers for the mile-long mylar sheet that would exit the atmosphere rolled up and then expand to full size once it reached orbit. The aluminized lettering would reflect the sun's rays, making whatever graphic it displayed visible for 10 minutes at a time at any given point on Earth. After roughly 20 days, it would disintegrate, leaving the sensors behind to continue collecting data for researchers.

'We could actually fly [the] Golden Arches in space," Lawson said in May 1993, referring to the ubiquitous McDonald's logo. With an estimated launch cost of $15 to $30 million, companies buying ads would cover expenses as well as contribute to a profit for Space Marketing—perhaps paying as much as $1 million for every day it was visible.

A few months later, the city of Atlanta began investigating Space Marketing's concept as a possible advertising vessel for the 1996 Olympics. "Special" glasses given away at point-of-purchase displays with cooperating sponsors would allow people to see the Olympic rings in orbit.

That last point appeared to be a concession to a growing chorus of concern over the idea of using space as a commercial entity. While proponents of the idea argued it was similar to blimps sailing overhead and displaying corporate propaganda messages, a coalition of scientists argued otherwise. Carl Sagan called it an "abomination," insisting that astronomy could soon become a practice of exploring the stars wedged between mile-wide ads for fast food and automobiles.

Consumer advocate Ralph Nader led a group calling for an orbital billboard ban, labeling it a practice of "defacing the heavens." Other groups decried it as commercial pollution of space and vowed to boycott any companies involved. Supporters of Nader's Public Interest Research Group picketed Space Marketing's Atlanta headquarters.

Lawson tried to parry the attacks in media, saying that the phrase "space billboard" was the source of the controversy. He preferred the term "environmental billboard" and said that the whole objective was to have a global company foot the bill for scientific research.

 

Conceptually, the idea of a floating Arby's logo the perceived size of the moon was too dystopian for lawmakers to handle. In 1993, Congress submitted legislation that would prohibit the Transportation Department from issuing a launch license to any company prepared to shoot a corporate image into space. (The bill was eventually signed into law by Bill Clinton in 2000.)

None of this publicity was particularly helpful to Space Marketing, which saw its Olympic plans wilt in the face of both legislative opposition and the probability of massive pushback from space advocacy groups. They turned their attention to Russia, which had no ethical objections to space endorsements, and facilitated a 1999 project that saw Pizza Hut attach its logo to the Proton rocket that carried supplies to the International Space Station. (The chain previously considered projecting its logo with lasers on the surface of the moon but abandoned the idea when they realized it would cost hundreds of millions of dollars.)

A rocket is propelled into space
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Space Marketing's investors moved on to the blimp industry and the firm was dissolved by 2007, when Lawson became CEO of airship manufacturer Techsphere Systems. As for the Last Action Hero stunt: It dissolved when Columbia learned Lorsch was threatening legal action, claiming he owned a copyright on the idea of commercial space advertising. The movie itself also failed to launch, becoming a notorious summer bomb when it was pitted against Jurassic Park.

While space has largely been off-limits to such "obtrusive" advertising by law, not everyone agrees that's for the best. Earlier this month, it was reported that NASA is looking into selling off the naming right to its shuttles as a way to recoup some of the organization's costs. When Lorsch testified before a Senate subcommittee in 2004 to review his 1981 proposal, he said that his sponsorship program might have earned NASA $5 billion in revenue if it had been implemented.

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