Though PepsiCo won't comment, executives close to the marketer say the company is rethinking every aspect of its media business and the disbursement of its $1.4 billion in media spending, partly as a result of an ongoing effort to cut costs.
Though some Pepsi executives are said to be pushing for a global consolidation, such a move wouldn't be likely overnight. And there's another school of thought within the Pepsi organization that such a radical shift might be logistically impossible for a company with multiple businesses.
For now, PepsiCo is said to be thinking along the lines of more regional consolidations, either across all divisions or in a single category. Last summer, PepsiCo consolidated media buying in Canada across divisions at BBDO Canada, Toronto.
Now, agency insiders say it's looking to consolidate U.S. media buying for fast-food chains such as Pizza Hut and Taco Bell at a single agency. The move could also include KFC Corp., whose $130 million in media buying is handled by Young & Rubicam, New York. The $150 million Taco Bell account is split between Bozell/Salvari Montgomery Sakoday, Costa Mesa, Calif., and the Richards Group, Dallas, while the $150 million Pizza Hut account is at BBDO Worldwide, New York.
Even sooner than any global action, however, PepsiCo is expected to make a move in Europe or Australia. Earlier this year, PepsiCo executives acknowledged European account activity but wouldn't disclose details of an estimated $100 million review said to include BBDO Worldwide, DDB Needham Worldwide, Y&R and possibly J. Walter Thompson Co. (AA, May 15).
Agency executives expect a decision this fall but are unsure at this point how many of PepsiCo's divisions the consolidation, if it's approved, would encompass.
Andrew Wallenstein and Jeanne Whalen contributed to this story.