PEPSICO PORES OVER MEDIA;MORE REGIONALIZED APPROACH IS POSSIBLE FOR $1.4B BUDGET

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PepsiCo is quietly undertaking an analysis of its media business that could have worldwide implications for all divisions and their agencies.

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.

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