After Nearly 50 Years, BBDO Loses Brand Pepsi in U.S.

TBWA Will Take Over Communications; Arnell to Handle Design

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NEW YORK (Adage.com) -- After nearly 50 years, BBDO Worldwide has lost its longtime hold on the Pepsi-Cola brand in North America to two Omnicom Group siblings.
PepsiCo spent about $162 million on brand Pepsi in 2007, according to Advertising Age's 100 Leading National Advertisers report.
PepsiCo spent about $162 million on brand Pepsi in 2007, according to Advertising Age's 100 Leading National Advertisers report.

The beverage giant today named TBWA/Chiat/Day, Playa Del Rey, Calif., communications agency for the Pepsi brand in the U.S. The agency already has responsibility for PepsiCo's Gatorade label and will now handle advertising duties for the trademark.

"We decided to appoint TBWA/Chiat/Day to refresh Pepsi's communication across multiple consumer touch-points and to reinvigorate Pepsi's legacy of leading-edge advertising," said Dave Burwick, chief marketing officer, PepsiCo North America Beverages, in a statement.

Pepsi's new identity
Pepsi also tapped Arnell Group, which created Pepsi's much-talked about new logo, as its design shop. Arnell will be responsible for brand identity and packaging innovation for Pepsi. The agency already handles PepsiCo's SoBe brand.

"This is fully complementary with our ongoing relationship with Arnell, who has created the new Pepsi identity and packaging and is responsible for the ongoing design and brand identity development," said Mr. Burwick.

BBDO will retain responsibilities for several core businesses, including Pepsi Max, Mountain Dew, Amp Energy and the North American Coffee Partnership. The move does not affect BBDO's PepsiCo business outside of the U.S. A BBDO spokesman declined to comment on the move.

Long history
Losing brand Pepsi is surely a major psychological blow for BBDO; after all, the agency was responsible for making Pepsi "the choice of a new generation," and inking mega-celebrity endorsement deals with pop culture icons from Michael Jackson to Michael J. Fox. It has worked with the brand since 1960. PepsiCo spent about $162 million on brand Pepsi in 2007, according to Advertising Age's 100 Leading National Advertisers report.
Dave Burwick
Dave Burwick

But in recent years, advertising around Pepsi has lacked its trademark sparkle, and its brands have lost their edge. U.S. volume has flagged, as has market share. PepsiCo now seems determined to put the brand back in the limelight.

Time of change
Today's agency realignment is just the latest in a string of announcements. There has been an internal restructuring, which put Mr. Burwick, a homegrown executive, in charge of marketing for the majority of PepsiCo's brands. And the company said last month that it would embark on a three-year strategy, pouring $1.2 billion into new initiatives, including a complete packaging, merchandising and marketing overhaul of its soft drinks.

In the last 12 months, PepsiCo, which has a long-standing history of working with Omnicom Group shops, has made a slew of agency changes, most notably purging Omnicom's Element 79 of some $440 million in brands, including Gatorade and Tropicana. Those accounts were largely parceled out among Omnicom shops, including TBWA; Goodby, Silverstein & Partners; Arnell Group; and BBDO's Juniper Park.
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