Various executives close to PepsiCo said the cuts were largely
focused on weeding out smaller specialty shops that had been
layered in over the years. Its move is counter to recent trends.
Several large marketers, such as Kraft and Unilever, have increasingly entrusted
smaller shops with bits and pieces of their brand portfolios.
Simon Lowden, chief marketing officer at PepsiCo's Beverages, told Ad Age in
February that the number of agencies the company
works with had ballooned in the past two to three years.
"It's grown because the agenda has gotten more complex and
busier," Mr. Lowden said at the time. But "when we look back on
things, the vast majority of the work is still done by our core
The spokeswoman identified those "core" agencies as Omnicom
Group networks TBWA/Chiat/Day, BBDO
and DDB, as well
as Omnicom shop TracyLocke and
Genesco, a sports-marketing agency with ties to TracyLocke. She
added that an agency with a contract that was allowed to expire
could be called on again down the road, if an opportunity arose
where that agency was the right fit.
About 100 shops, or 65% of the division's partner agencies, were
removed. Interpublic Group of Cos.' Huge , which did work related
to the Refresh Project, for example, is no longer working with the
brand. MDC Partners' Anomaly , which had been slated to handle the
relaunch of Pure Leaf, a premium tea brand, stopped working with
PepsiCo months ago,
according to an agency spokesman.
Independent Ruder Finn is no longer working with the beverage
division, though a spokesman said it continues to handle a
corporate recycling initiative. One Omnicom shop that 's not
benefiting from the moves is Porter Novelli. The agency, which said
it has handled projects for Pepsi's nutrition group, no longer
works with the beverage division.
But certain non-Omnicom shops, such as Dentsu's Firstborn, WPP's
VML, Interpublic's Weber Shandwick and independent Olson PR appear
to have either retained or added to their PepsiCo business. PepsiCo declined to
name any of the agencies that were cut.
Calling the approach "need-based, "Mr. Lowden said the roster
hadn't been pared based on a goal to have a certain number of
agencies on each brand. Instead, various brand teams were told to
focus on partnerships and programs aligned with business
The consolidation, announced at an
investor meeting earlier this year, was billed as a bid to increase
efficiency and shift into brand-building money allocated for things
such as agency fees. The company has also said it would spend an
extra $500 million to $600 million this year to advertise its
brands, with a focus on North America.
Contributing: Alexandra Bruell, Kunur Patel