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PepsiCo May Be Looking at Omnicom Consolidation

By Published on .

CHICAGO (AdAge.com) -- Frito-Lay North America shifted its estimated $10 million promotional marketing account to Omnicom Group's Tracy Locke Partnership, Wilton, Conn., from Publicis Groupe's Frankel, Chicago.

The move combines PepsiCo's U.S. promotional and retail marketing efforts for soft drinks and salty snacks with Tracy Locke, which already handled its Pepsi-Cola North America division.

Tracy Locke has

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been working on joint retail merchandising programs for Frito-Lay and Pepsi-Cola for several years.

"We're just thrilled to have the business," said Tracy Locke CEO Gary Von Kennel, who referred additional questions to PepsiCo.

Omnicom consolidation?
The move fits with what industry insiders believe is PepsiCo's larger strategy to consolidate all marketing within Omnicom.

In September, PepsiCo and sibling Quaker Oats Co. moved $350 million in accounts out of Interpublic Group of Cos.' Foote, Cone & Belding, Chicago, shifting them to a yet-to-be-named Omnicom agency.

Omnicom's BBDO Worldwide, New York, currently handles Pepsi-Cola and Frito-Lay.

Blow to agency
The loss of Frito-Lay comes as a blow to Frankel, which suffered from reduced client spending and layoffs this year. The agency trimmed 75 jobs -- or 10% of its workforce -- in two rounds of cuts earlier this year. Losing Frito-Lay, one of its top-five clients, could lead to further cuts next year, a spokeswoman said.

"It's too soon to tell, but there will be some changes after the first of the year," she said.

Frankel retains PepsiCo's Tropicana business.

Staff writers Hillary Chura and Kate MacArthur contributed to this report.

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