Pepsi Marketers Test Unique Agency Model With Omnicom

New Structure for Beverage Marketer Curates Talent From Across Holding Company to Work on Projects for the Brand -- and the Model May Spread

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The chance to work on a Pepsi commercial starring Beyoncé that will air in 70 countries is one any agency would leap at. So when the opportunity came up, it was surprising that neither BBDO, which has long handled Pepsi creative overseas, nor TBWA/Chiat/Day, which handles advertising for Pepsi in North America, was tapped for the job.

Instead, the assignment was entrusted to another agency under Omnicom Group, 180 LA. That decision was the result of a new, more flexible agency model PepsiCo marketers are experimenting with dubbed Galaxy.

'Mirrors,' the new ad featuring Beyonce, is the first work to come out of Galaxy.
'Mirrors,' the new ad featuring Beyonce, is the first work to come out of Galaxy.

The debut last week of the ad "Mirrors" -- in which Beyoncé gyrates to her new single, "Grown Woman" -- marked the first project to come out of Galaxy.

"The idea of Galaxy is curating talented teams across the right projects on Pepsi," said Brad Jakeman, president-global beverages group. "Where the efficiency comes in, we're not buying a whole agency infrastructure. We're curating the exact number of people at the exact seniority with the exact capabilities we need."

PepsiCo, which last year drastically trimmed its roster of agencies in the beverage space, has been talking for the past year about building a "unique agency model" within Omnicom. For its first global ad, launched a year ago, TBWA/Chiat/Day and BBDO collaborated on the spot. The goal has been to get the best work possible from a variety of shops without running separate agency structures. The hope is that Galaxy will allow that to happen.

Whether it's the "brand-agency leader" structure that Procter & Gamble uses or Red Fuse, the dedicated agency team for Colgate at WPP, marketers have been experimenting with any number of agency models, and the jury is still out on which works best.

PepsiCo marketing execs stress that the model they're building is distinct. Unlike some of the dedicated agencies out there -- like the "team" approach for Ford, Mazda, Lincoln, Bank of America and Colgate at WPP -- Galaxy is a small team of only a handful of execs with backgrounds in account planning and management specifically. That group, working with Pepsi execs, evaluates projects presented by the brand and determines which agency or mix of talent within the Omnicom network is best suited for the job. In the case of "Mirrors," it selected 180 LA.

"Omnicom is a really big name, but behind that big name exists a massive and most talented bench of creative strategists and production people," said Chris Mendola, chairman-founder of 180. "Pepsi is really smart to recognize this and seek out the best and most talented for Pepsi."

Still, it's not as if the entire network is made to compete for Pepsi projects from Galaxy. The model is both "calculated" and "thoughtful," Mr. Mendola said. "I don't know that agencies love responding to jump balls. I know my agency doesn't. We like to have a conversation with the client, make the work with the client, as opposed to coming in and doing a ta-da presentation."

Mr. Jakeman said he wasn't interested in creating an entity within Omnicom that lived and breathed the Pepsi brand alone; he prefers those contributing to Pepsi advertising have exposure working on other big brands, from autos to fashion.

"We're really benefiting from a much more expanded gene pool than if we created a whole group of people that only worked on Pepsi," Mr. Jakeman said. "And they're working on the teams, in the environments they've chosen. They're embedded in the agencies they've chosen to join."

One wrinkle the new agency model presents? The need for time. Galaxy operates best when Pepsi is able to give Omnicom a very clear brief with a long lead time. Providing the group insight into the 18-month content strategy allows it to plan to have the right creative talent available for the project, Mr. Jakeman noted.

There's interest more broadly within PepsiCo to use the Galaxy model. For now it's limited to the global beverage group, but marketers around the world, as well as the company's snack brands, are exploring it.

Simon Lowden, CMO at Pepsi Beverages North America, said it's a model that he's familiar with and that makes sense. Mr. Lowden, who previously served as CMO-PepsiCo International, said that his former team would often brief various offices of BBDO on projects like the World Cup, despite the fact that BBDO, Paris, was its lead agency at the time.

Mr. Lowden said he sees North America, Pepsi's biggest market, embracing a structure that allows for "strategic ownership and creative flexibility." By that he means the brand's relationship with its lead agency, TBWA/Chiat/Day, won't change, but Pepsi could look to other resources for certain projects. Already, it's worked with outlets like Funny or Die to create popular videos around the Super Bowl and, most recently, for Pepsi Max with Jeff Gordon's prank "test drive."

Looking ahead, Galaxy is working on assigning more projects for the brand, though Mr. Jakeman declined to provide specifics. "[Galaxy] has generated some of the best work we have done on Pepsi, the most efficiently," he said.

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