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Why a Banned Ad Is Great News

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As SodaStream International  (NASDAQ: SODA  )  investors are probably aware, the company's new ad has been banned from airing in the United Kingdom. SodaStream has recently been taking on a more aggressive marketing campaign and hired ad legend Alex Bogusky, a social and environmental activist, to create its most recent ads. These ads are designed  to help raise awareness for its products and their positive impact on the environment. The real question is: What does this ad ban mean to investors? 

A blessing in disguise 
While investors were probably disappointed after first hearing of the news, there's no need to fret. The ad has already aired in the U.S., Sweden, and Australia, and the YouTube video above has received over a million views now, which is largely a result of the ad ban creating some buzz. The U.K. rejected the ad, saying, "In our view, its visual treatment denigrated other soft drinks." SodaStream representatives have responded and will work with Clearcast to get the ad aired, but the real story here is that the ad has created exactly what SodaStream wanted -- an epic battle.

It's sparring time 
This controversy firmly plants SodaStream against the big players like Coca-Cola  (NYSE: KO  ) , Dr Pepper Snapple Group (NYSE: DPS  ) , and PepsiCo (NYSE: PEP  ) . Investors on both sides of the fight will have to keep an eye on whether consumers start to become more socially conscious about using plastic bottles. While SodaStream certainly isn't a significant threat now, it will be interesting to see if consumers become concerned enough to treat plastic bottles like we all now treat Styrofoam cups. In that case, the big players above may have to create more environmentally friendly bottles that could pressure margins with higher cost. 

What it all means  
Investors will have to wait to see if the advertisements have a tangible impact on revenue over the next year, but there's no doubt that more people know about SodaStream and its cause now.  

SodaStream's carbonation technology sounds simple, right? Well, this razor-and-blade company offers an intriguing opportunity for growth that may be harder to duplicate than you might think. Our premium report on SodaStream explains the opportunities as well as the risks in the company. The report comes with a year's worth of updates, so just click here to get started.

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10/21/2016 4:00 PM
SODA $24.04 Up +0.09 +0.38%
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