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 (AdAgeChina.com) -- PepsiCo has consolidated the media planning and buying business for its food and beverage brands in China with Omnicom Group's OMD. The account, which also includes digital, is reported to be worth between $150 million to $225 million.

OMD already managed media for Pepsi's food business in China, but planning and buying for Pepsi's beverages was handled by WPP's Mindshare, which participated in a pitch to keep the business. Mediaedge:cia and Vizeum also took part.

The decision "to pick the best partner going forward [was] very close," said Harry Hui, chief marketing officer, Greater China for PepsiCo's beverages business unit in Shanghai.

PepsiCo added in a statement that the "media-planning duty of [the] food division will be reviewed in a later stage."

Mindshare could not be reached for comment, and OMD referred calls to the client.

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. That investment is the company's largest push in the market in the nearly 30 years PepsiCo has been doing business in China.

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, 2010, is projected to attract 70 million people, 95% 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 won planning and buying duties for Danone in China as part of a global review of the Danone's media business.

Contributing: Normandy Madden in Hong Kong


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