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

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. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.