The closed 10-week review pitted the company's media agencies against one another. Creative assignments aren't affected.
TN MEDIA, BBDO LOSE
Losing out were TN Media, Taco Bell's national media buying agency, and BBDO Worldwide, which handled buying for Pizza Hut and continues to handle creative.
"We go to the bargaining table with more money up front" as a result of the consolidation, said Dick Cahill, a KFC franchisee involved in the review. "It's a bigger bang. Hopefully, it will deliver clout."
Mr. Cahill said that despite the consolidated buying duties, the chains "are still operating as individual entities."
The combined media clout immediately gives Tricon bargaining power against rival fast-feeders McDonald's Corp. and Burger King Corp. for major media properties.
For example, McDonald's and NBC are currently negotiating commercial time in the fast-food category for the next five Olympics. With McDonald’s devoting nearly half its media budget to local advertising, industry watchers wonder if the marketer will pony up for category exclusivity. If it doesn’t, it could open a window for Tricon.
The real contest for Tricon’s media account pitted BBDO and Y&R. TN Media was effectively removed from the running when sibling Bozell Worldwide, Southfield, Mich., this month landed Little Caesar Enterprises, a Pizza Hut rival.
One executive close to the review said the agencies in the pitch were willing to accept commissions of less than 1% to win the business.
OTHER MEDIA EDGE VICTORIES
The Tricon win is the latest in a string of victories for Media Edge and parent Young & Rubicam, which is preparing to go public. In another big win, Media Edge got the $150 million consolidated account of Glaxo Wellcome last July.
One link that may have helped Y&R is its relationship with Tricon CEO David Novak, a former KFC president and longtime PepsiCo marketing executive. Tricon was spun off from PepsiCo last fall.
PepsiCo itself has been considering a media consolidation linking its Pepsi-Cola Co. and Frito-Lay units. And Frito-Lay Chairman Steven Reinemund is looking at a global realignment of assignments now handled by BBDO, DDB Needham Worldwide and Y&R Advertising (AA, April 13).
Executives close to the situation said PepsiCo most likely will decide not to consolidate but will instead keep Pepsi-Co la media responsibilities with BBDO while moving Frito-Lay from TN to Grey Advertising. A Pepsi-Cola spokesman said no announcements have been made.