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OMD Wins Pepsi's Chinese Media Business

Shop Beat Out Incumbent Mindshare to Expand Its Global Duties for Company

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NEW YORK (AdAge.com) -- Omnicom Group's OMD has won media planning and buying duties for PepsiCo's drinks business in China, according to executives close to the matter. The account, which also includes digital, is reported to be worth between $150 million to $225 million.

OMD, which currently manages media planning and buying for Pepsi in the U.S. and its food business in China, is now running a significant portion of the company's global media business.

WPP's Mindshare was the incumbent in China. The agency could not be reached for comment. OMD referred calls to the client and Pepsi executives did not return calls before press time.

China is a major focus for PepsiCo, which announced a year ago that it planned to invest $1 billion in the region by the end of 2012. The planned investment is the company's largest push in the market in the nearly 30 years PepsiCo has been doing business there.

More recently, the company announced plans to be the exclusive non-alcoholic beverage and snack partner for the USA Pavilion at the 2010 Shanghai World Expo. That deal should provide plenty of exposure for PepsiCo's brands, given that the event, held May 1 through Oct. 31, is projected to attract 70 million people, 95% of whom are expected to hail from mainland China.

Not surprisingly, China is one of PepsiCo's fastest growing international markets. During the third quarter, net revenue grew 12%, while profits jumped 52% in the Asia, Middle East and Africa division. Beverage volume grew 9% during the period, while snack volume increased by 8%.

For OMD this marks its second big win in the region in less than a month. In late October the agency took control of planning and buying duties for Danone in China as part of a global review of the consumer-package-goods giant's media business.

Other recent wins for OMD include Virgin Atlantic's $30 million-plus traditional and digital global-media business in early September, and Vodafone's $1 billion global media-buying account in late August, which was part of a consolidation effort by the world's largest mobile telecom provider. In early August the shop also picked up Monster's nearly $200 million media planning and buying account.

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UPDATE: After this story was published, PepsiCo sent a statement, elaborating that OMD will handle media planning for beverages and buying for food and beverages. "This appointment sees the consolidation of the food and beverage divisions' media-buying volume with OMD, [which] previously handled the food business. The media-planning duty of [the] food division will be reviewed in a later stage." The statement added that other agencies pitching for the business include Mediaedge:cia included and Vizeum.

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