In the courtship rituals of Madison Avenue, there is something particularly deflating about not being asked to dance at all.
PepsiCo, the snack and beverage colossus whose media spending makes it one of the most coveted clients in the advertising world, has decided to consolidate its global media duties at Publicis Groupe. The decision was made without a formal review — which is to say, Omnicom, the incumbent that had been handling the business, did not receive the customary opportunity to defend itself in a competitive pitch.
The move represents a significant loss for Omnicom, which has been one of the dominant holding companies in the United States and which had counted PepsiCo among its tentpole relationships. (The sting of losing an account is one thing; the sting of losing it without a fight is quite another.)
For Publicis, the French holding company that has spent the past several years positioning itself as a data-and-technology-first alternative to its American rivals, the win validates a strategy that its chief executive, Arthur Sadoun, has championed relentlessly. Mr. Sadoun has argued that clients increasingly want integration — media buying, data analytics and creative services bound together in ways that traditional agency structures have been slow to provide.
PepsiCo, for its part, has been reshaping its marketing operations for some time, seeking efficiencies in an era when the sheer volume of media channels has made coordination both more important and more complicated. The company, whose brands include Lay's, Gatorade, Tropicana and its namesake cola, spends billions of dollars annually on advertising worldwide.
Whether the shift signals a broader trend — clients bypassing the elaborate pitch process in favor of direct consolidation — remains to be seen. But for Omnicom, the immediate lesson is clear enough: sometimes the review you don't get hurts more than the one you lose.
Original story published in adage.com: "What PepsiCo’s global media shift means for Omnicom - Ad Age"