The North America beverage unit of PepsiCo Inc., which had reportedly been working with about 150 ad agencies, has cut that number to 50 shops.
PepsiCo spokeswoman Gina Anderson would not name any of the agencies that were cut, but did confirm that the beverage group is now working with 50 agencies after letting various contracts expire. “We have not eliminated any relationships, we just haven”™t renewed contracts with certain agencies,” she said. “And those that we are now not working with, this doesn”™t mean we would never work with them again. We want to strengthen our core relationship with Omnicom Group. We have a long-standing established history of working with them,” she said. “We want to increase our working versus non-working dollars.” She called agency fees an example of non-working dollars.
Anderson hesitated to call it a cost-cutting move, saying that “we want to put more money into our marketing spend. This makes our marketing organization more efficient.” PepsiCo said earlier this year that it would spend an extra $500 million to $600 million to advertise its brands this year, with an emphasis on North America.
Ad Age.com reported that executives close to PepsiCo said the idea was to cut some smaller specialty agencies. Anderson said the core agencies are Omnicom”™s TBWA/Chiat/Day, BBDO and DDB, TracyLocke and Genesco, a sports marketing agency.
As for agencies that have reportedly been eliminated, AdAge.com reported that Interpublic Group”™s HUGE, which had been working on the Refresh Project, is no longer working with the brand. The report also said that MDC Partners”™ Anomaly, which was supposed to work on the relaunch of the premium tea brand Pure Leaf, has not worked with PepsiCo for months.
Ruder Finn and Omnicom”™s Porter Novelli are said to be no longer working with the beverage business.
Dentsu”™s Firstborn, WPP”™s VML, Interpublic”™s Weber Shandwick and Olson PR have either kept their work or added more, AdAge said.
