Pepsi Shakes Up Digital Advertising Roster

Amp Goes Into Review and Arnell Is off Sobe

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NEW YORK ( -- PepsiCo is making some major changes to its digital-advertising roster, and its traditional agency partners on beverage brands are conspicuously absent.

The soft-drink maker has dropped Omnicom Group's Arnell Group from its Sobe creative account, put the digital business for Amp in review and named Huge to build a platform for brand Pepsi, according to executives familiar with the situation. The moves also show that Pepsi's continued flirtation with independents and with Interpublic Group of Cos. continues despite a contract with Omnicom that long kept the lion's share of Pepsi business at the holding company.

PepsiCo declined to comment.

Firstborn picks up Sobe
Arnnell's role as Sobe's creative agency of record has shifted to New York-based independent digital agency Firstborn, which will handle digital strategy and execution. Interpublic's Weber Shandwick will handle PR. The review also included the Barbarian Group, Big Spaceship, Undercurrent and Rokkan, all independent agencies with offices in New York.

Meanwhile, PepsiCo is conducting a digital agency review for its Amp brand; R/GA, an Interpublic-owned agency, previously handled the work, but not under an agency-of-record distinction. R/GA was responsible for the controversial "Amp Up Before You Score App," which Pepsi dumped last month. According to an executive familiar with the matter, R/GA resigned the business before the release of that app.

Firstborn, Weber Shandwick and R/GA declined comment and referred calls to the client.

Arnell was named Sobe's "agency of innovation and communications" in early 2008. Peter Arnell directed this year's 3-D Sobe Super Bowl ads and designed new packaging for the brand, also introduced this year. Calls to Mr. Arnell were not immediately returned.

As recently as August, PepsiCo had confirmed its relationship with Arnell Group, saying it remained the agency of record for both Sobe and Tropicana. Now it appears Arnell Group has maintained only the Tropicana business. Interestingly, the unsuccessful redesign of that brand's packaging has been the root of much of the bad publicity surrounding Mr. Arnell in the past year.

Broader digital play
The Firstborn appointment appears to be part of a broader strategy to improve the company's approach to digital marketing, said executives familiar with the matter. Last month, PepsiCo skipped over its communications agency, Omnicom's TBWA/Chiat/Day, Los Angeles, and appointed digital agency Huge, an Interpublic shop with a heritage in website development, to build a platform for brand Pepsi.

Today Pepsi said it plans to pledge at least $20 million for projects consumers create to refresh their communities. Ultimately, consumers will list their projects online and vote on the winners. The "Pepsi Refresh Project," which Huge could have a hand in, is an evolution of the brand's "Refresh Everything" effort that kicked off in January of this year. The new campaign will launch in January 2010 and will have a heavy social-media presence. Similar to Pepsi's approach this year, where much of the brand communications revolved around the "Refresh Everything" message, much of the marketing communications for 2010 will revolve around the "Pepsi Refresh Project."

PepsiCo has indicated that it would be increasing its focus on the digital space. CEO Indra Nooyi has said that PepsiCo has been shifting more of its ad spending toward digital media and recently told Bloomberg that the company has moved almost a third of its budget into the digital world. Five years ago, she said, that type of digital spending didn't exist. PepsiCo spent $18 million on measured internet media in the U.S. during 2008, according to TNS Media Intelligence.

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Contributing: Michael Bush

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