Pepsi severs BBDO ties after nearly five decades

After 48 years, BBDO Worldwide has lost its long-time hold on Pepsi-Cola branding activities in North America.

BBDO will continue to manage Pepsi-Cola beverages such as Amp, Aquafina, Diet Pepsi Max, Mountain Dew and Sierra Mist as well as products that PepsiCo markets jointly in North America with Starbucks Coffee Company, which includes Frappuccino.

The agency already has responsibility for PepsiCo's Gatorade label and will now handle advertising duties for the trademark.

BBDO will continue to create campaigns for Pepsi-Cola in markets outside the United States.

The beverage company has named TBWA/Chiat/Day as the new communications agency for the brand in US.

The shift represents an expansion of a fledgling relationship between PepsiCo and TBWA/Chiat/Day; in April, the company gave the agency the creative assignment for its Gatorade line of sports beverages.

The shifts of the Pepsi-Cola and Diet Pepsi creative assignments are the most recent in a series as PepsiCo seeks to shake up its marketing methods. In addition to Gatorade and Tropicana, other brands with new creative agencies include Doritos snacks, Lay's potato chips, Propel water, Quaker cereals and Rice-A-Roni.

The move does not affect BBDO's PepsiCo business outside of the US. BBDO office in Dubai declined to comment on the move.

A local industry source in the UAE said the move was quite normal, based on a periodical request for new pitches in several markets.

This time another agency won the pitch, said the source, but that is just related to the branding activities. "On the local level we still work with Pepsi Co, we also work with them in the US in other aspects of communication," said the source.

TBWA/Chiat/Day, which replaces BBDO, is also owned by Omnicom. It is part of the TBWA Worldwide unit of Omnicom. The office will also take over from BBDO the creative duties for Diet Pepsi.

PepsiCo said last month it would spend $1.2 billion (Dh4.4 bn) over three years to revive sales of carbonated soft drinks in North America, which have flagged for the Coca-Cola Company and other beverage behemoths as well as for PepsiCo.

That led trade publications such as Advertising Age to speculate that BBDO's hold on Pepsi-Cola was loosening.

The change in agencies is being made "to refresh Pepsi's communications", Dave Burwick, the new chief marketing officer for the PepsiCo North America beverages division, said in a statement on Monday, "and to reinvigorate Pepsi's legacy of leading-edge advertising".

For decades, BBDO and Pepsi-Cola collaborated on some of the most popular and successful sales efforts.

The ads created by BBDO, part of the Omnicom Group, carried themes like "the choice of a new generation" and "the joy of Pepsi". Many of the campaigns helped transform Pepsi-Cola into a tough competitor that challenges Coke constantly for control of the carbonated beverage market.

But lately the battle between Coke and Pepsi is being won not by either brand but mostly by non-carbonated products like juices, teas, energy drinks, sports beverages and bottled water.

"We decided to appoint TBWA/Chiat/Day to refresh Pepsi's communication across multiple consumer touch-points and to reinvigorate Pepsi's legacy of leading-edge advertising," said Dave Burwick, chief marketing officer, PepsiCo North America Beverages, in a statement.

Pepsi decided to let go of the agency that was responsible for making Pepsi the choice of a new generation and inking mega-celebrity endorsement deals with pop culture icons from Michael Jackson to Michael J Fox.

It has worked with the brand since 1960. PepsiCo spent about $162 million on brand Pepsi in 2007, according to Advertising Age's 100 Leading National Advertisers report.

Pepsi also tapped Arnell Group, which created Pepsi's much-talked about new logo, as its design shop. Arnell will be responsible for brand identity and packaging innovation for Pepsi.