PepsiCo Moves Digital Duties for Gatorade to VML

Beverage Giant Goes Outside Omnicom Again, This Time to WPP

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NEW YORK ( -- PepsiCo has shifted digital duties for its Gatorade brand from Omnicom Group's TBWA/Chiat/Day, Los Angeles, to WPP interactive agency VML, executives familiar with the matter say. The decision is the second time in recent months the beverage giant has moved digital business from Omnicom and TBWA.

TBWA and VML referred calls to Gatorade. "We have been looking for a partner who can help us elevate our presence in the online world and continue to enhance Gatorade's relevance for a new generation of athletes," said Pete Brace, a spokesman for Gatorade, in confirming VML has been added to the brand's roster. Mr. Brace said VML will help the brand with the launch of "G Series."

TBWA is expected to remain the brand's strategic and creative agency, but it is further evidence of some cracks in the relationship, at least on the digital front. Executives said the moves mirror ones made in October for brand Pepsi; the beverage maker is looking for best-in-class digital services, and while it may still call on TBWA to do some digital work, website development and other projects for Gatorade will likely come from VML.

In October, brand Pepsi took website design and development for its Refresh Everything platform to Interpublic Group of Cos. digital agency Huge. Then Omnicom's Arnell Group lost Sobe when Pepsi went with a digital and PR-only strategy for the brand, with New York independent Firstborn and Interpublic's Weber Shandwick picking up the work, respectively.

Omnicom digital agencies Organic and Tribal DDB, as well as Interpublic's Huge and independent Odopod, also participated in the Gatorade pitch, executives said.

The brief included digital surrounding the brand's sampling and promotions to launch the "G Series," as well as the sport drink's brand site, social and mobile.

The PepsiCo brand is in the midst of yet another update. Gatorade plans to spend $30 million on product and packaging development this year, as it looks to innovate itself out of a prolonged sales slump. Its "G Series" is expected to hit shelves this spring and will include three types of products, including two new beverages.

In April 2008, Gatorade shifted its account from Element 79, Chicago, to TBWA/Chiat/Day, Los Angeles, after six years. With sales of Gatorade flagging, TBWA spearheaded the "What Is G?" campaign a year ago. That campaign debuted alongside new graphics for the brand.

Gatorade has said those efforts were successful, but sales and market share both fell in the first half of last year, when the "What Is G?" marketing campaign was most prominent in the marketplace. In the first nine months of last year, overall Gatorade volume continued to slide, dropping 14%, according to Beverage Digest, while volume share dipped 2.8 points to 75%. G2 boosted the overall brand, with a 25% surge in volume. During the same time period, competitor Powerade gained 2.6 points to raise its volume share to 24%.

According to Kantar Media, Gatorade spent $162 million on measured media in 2008 and $108 million in the first three quarters of 2009.

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Rupal Parekh contributed to this report.

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