Pepsi Says “You’re Fired”

Pepsi was the choice of a new generation and a foundational client for many in Adlandia. But some of those ad pros are being handed their jocks this week, as Pepsi prunes its list of North American agencies on the roster from from 150 to about 50.

In related news, CEO Indra Nooyi also said Pepsi will spend an extra $500 million to $600 million to advertise its brands this year, with a focus on North America.

It’s an interesting combination, this one-two from Nooyi. The client is saying Pepsi values advertising more than ever, but that they no longer have a need for a plethora of providers. Is this merely a reflection of how bloated a marketing operation can become at a top consumer brand? Or does it point to something else, like agencies of all stripes adding more power (and capabilities) under the hood?

One agency exec on the Pepsi business told Ad Age, “I don’t think these announcements are any more sinister than the fact that it’s earnings season and the company needs to show Wall Street that it’s cutting costs.”

Cutting costs that allow for a greater ad spend. That’s a pretty slick equation.

According to Fortune, Nooyi admitted that Pepsi marketing, besides being underfunded, hasn’t been all that good lately and said she’s taking steps to make it better.

Fortune also mentions that PepsiCo will cut costs by laying off 8700 employees.

About David Burn

Co-founder and editor of AdPulp. I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. I worked for seven agencies in five states before launching my own practice in 2009. Today, I am head of brand strategy and creative at Bonehook in Portland, Oregon.

Comments

  1. Krazyzeeday says:

    Pepsi restructuring? Displaced 25+
    Yrs worth of valuable employees. Down graded positions just to promote younger workers for less pay. No loyalties for hard work anymore!! Pepsi needs to remember how their CEO & CFO & Stockholders got rich!! Off the backs of frontline employees… How about they downgrade their positions & take pay cut like the rest of us!! Just so I can ask, How’s that working for you?? Fizzed off!