Pepsi Moves Digital Business in China to Tribal DDB

Focuses on Interactive Media to Reach Young Consumers

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SHANGHAI (AdAge.com) -- PepsiCo has moved the digital creative business for its beverage brands in China, including Pepsi, 7Up, Miranda, Mountain Dew, Tropicana and Gatorade, to Tribal DDB Worldwide, the digital marketing arm of Omnicom Group's DDB Group.

Pepsi has increased its use of digital media in China to reach young Chinese who get entertainment and information from mobile phones and the internet rather than TV.
Pepsi has increased its use of digital media in China to reach young Chinese who get entertainment and information from mobile phones and the internet rather than TV.
The win follows a four-way pitch against the incumbent, Agenda, a digital agency acquired this year by WPP Group, as well as Saatchi & Saatchi Energy Source Integrated Interactive Solutions in Shanghai, and Eight Partnership, an independent marketing consultancy based in Hong Kong. Media buying for digital media in China will continue to be handled by All Yes Information Technology, an online advertising agency owned by Focus Media.

Brand-building investments
Last month, Pepsi announced plans to invest $1 billion in China over the next four years to expand its business in one of the most important emerging markets. Some of the funds will be invested in brand-building initiatives and the development of new products tailored to Chinese consumers.

Many advertisers are expected to cut back on ad spending in China next year, partly as a result of the global recession that is slowing GDP growth in the mainland, and partly because spending was inflated this year because of the 2008 Olympic Games.

But Pepsi says it will increase its total media spending in China in 2009, and plans to grow spending in digital media specifically by more than 30% next year compared to 2008.

'Call to action'
Digital media "has mainly been used for Pepsi and 7Up campaigns in the past but next year, it will be expanded to other brands like Miranda, both existing brands and new ones we haven't launched yet. We will be using new media much more aggressively next year," said Mimi Vong, PepsiCo's Shanghai-based interactive marketing director for China.

Pepsi is already one of the most active digital media advertisers in China, the world's largest mobile phone and internet market. For the last three years, it has run a "call to action" program, the Pepsi Creative Challenge, that is "very much about consumers being in control," said Harry Hui, Shanghai-based chief marketing officer of PepsiCo's beverage business unit in Greater China.

This year, the contest gave Chinese consumers an outlet to express excitement about the 2008 Olympic Games in Beijing. Pepsi invited consumers to upload photos and slogans or cheers on six Chinese web sites that are popular with Pepsi's target market of 12-to-24-year-old Chinese in first- and second-tier cities.

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