10002: PepsiCo Hearts Omnicom.

Advertising Age reported PepsiCo consolidated its agency roster, dumping about 100 mostly smaller, non-Omnicom shops. Gee, what a shocker. Now all PepsiCo pitches—or more accurately, PepsiCo switches—will be staged between Omnicom agencies. In other words, don’t expect the food and beverage company to draw any interest from producers at The Pitch.

PepsiCo Completes Agency Reductions

Mostly Smaller, Non-Omnicom Shops Among Those Eliminated

By Natalie Zmuda

PepsiCo’s North America beverage division has completed the downsizing of its agency roster, eliminating many of the smaller shops.

A spokeswoman confirmed that the beverage group is working with about 50 agencies, after letting various contracts expire. She said the moves are intended to strengthen the company’s relationships with Omnicom Group, the ad-holding company with which Pepsi has long been aligned.

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 agencies.”

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 objectives.

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

9944: Goodby, Silverstein & Partners & McCann.

Adweek reported Goodby, Silverstein & Partners and McCann have created a joint agency to handle the Chevrolet account. It’s bad enough that Omnicom manages to keep accounts under the global umbrella via Corporate Cultural Collusion, but this move shows the holding company will conspire with any White agency to seize billings. The new enterprise is called Commonwealth—which probably means that everyone with common skin color can expect to share the wealth.

Goodby and McCann Form New Agency to Handle Chevy in Global Creative Consolidation

Commonwealth is a 50/50 joint venture

By Noreen O’Leary

Agencies at two rival holding companies have become partners in a new company, Commonwealth, formed to work on Chevrolet’s global account. Omnicom’s Goodby, Silverstein & Partners, San Francisco, and Interpublic’s McCann Erickson Worldwide, N.Y., have signed on to the 50/50 joint venture after a creative review to consolidate the global business for the General Motors brand.

In the review launched last autumn, GM roster shops Omnicom, Interpublic, Publicis Groupe and Cheil Worldwide put forth proposals to the auto marketer.

Chevrolet, GM’s largest brand, previously worked with 70 global agencies. The creation of the new Detroit-based Commonwealth agency follows the recent selection of Carat as GM’s agency for media planning and buying.

“These agency consolidations are expected to create about $2 billion in savings over the next five years, with a portion used to take advantage of key global marketing opportunities and strengthen the focus on our global Chevrolet brand, and a portion hitting the bottom line,” GM global cmo Joel Ewanick said in a statement.

GS&P has been since 2010 the lead creative agency on Chevrolet in the U.S.—the brand’s largest market—and is behind the “Chevy Runs Deep” strategy. McCann Worldwide has overseen the brand in many global markets including Mexico, Canada, Brazil, India, Japan, China and Latin America (Brazil and China are just behind the U.S. as Chevy’s largest markets). Commonwealth will now handle creative in most global regions except for China, India and Uzbekistan, where marketing efforts will continue to be handled by agencies that have been working on the brand in those countries.

Commonwealth will be managed by an eight-person global advisory board, with assignments handled through global hubs in Detroit, Milan, Mumbai and Sao Paulo. The agency’s board includes GS&P co-founder Jeff Goodby who is Commonwealth’s creative chairman; Linus Karlsson, McCann’s chairman, chief creative officer of N.Y. and London; Washington Olivetto, chairman at WMcCann Brazil and CCO McCann Worldgroup Latin America; and Prasoon Joshi, president, McCann Worldgroup South Asia.

9908: C’MON WHITE MAN! Episode 18.

(MultiCultClassics credits ESPN’s C’MON MAN! for sparking this semi-regular blog series.)

4A’s Agency Thought Leader Compensation Summit allowed a bunch of industry honchos to ponder payment plans between clients and agencies. The headline whiner was TBWA\Worldwide Global Director of Media Arts Lee Clow, who declared, “Unfortunately, in our business, we get paid like we’re doing our clients’ laundry. We haven’t figured out that the ideas that we create can become a very powerful asset to the brands we work for. Many of the ideas—whether they be slogans or advertising forms and styles or a voice that we create for brands—could be listed on the balance sheet of our clients as an asset with millions and millions of dollars in value.”

Gee, it’s always fun to watch a speech about being underpaid delivered by a multimillionaire.

If Clow is truly clueless about the compensation schemes fueling our business, he ought to call Omnicom CEO and President John Wren. Maybe Wren will explain how contracts, cronyism and Corporate Cultural Collusion stifle competition and ultimately turn advertising agencies into generic commodities. Why, just peep PepsiCo and Quaker Oats to realize Omnicom has effectively established that Goodby, Silverstein and Partners and TBWA\Chiat\Day are parity with Juniper Park and Fathom Communications. Plus, it’s a safe bet that Clow received stupid money when his shop was sold to the global holding company. Perhaps “we haven’t figured out that the ideas that we create can become a very powerful asset to the brands we work for” because folks such as Clow were too busy collecting their cuts from corporate mergers and buyouts.

But wait, there’s more. While the iconic White advertising agencies are paid like they’re doing their clients’ laundry, the minority shops are stuck fighting over the lint in the dryer filters. And that’s no ancient Chinese secret, Mr. Lee Clow.

C’MON WHITE MAN!

9894: Quaker Oats Man On The Move.

Advertising Age reported PepsiCo shifted its Quaker Oats business to a new agency sans review. It’s actually another example of Corporate Cultural Collusion perpetrated by Omnicom. Give the holding company credit for apparently having locked PepsiCo into a long-term contract, as evidenced by the Quaker Oats Man’s migration from Element 79 to Goodby, Silverstein & Partners to Juniper Park to Energy BBDO—all shops within the Omnicom stable. It’s only a matter of time before the brand goes to Fathom Communications.

PepsiCo Shifts Quaker Creative to Energy BBDO

Move Comes Under New Quaker CMO Justin Lambeth

By Maureen Morrison

PepsiCo has shifted creative duties for its Quaker portfolio of foods and snacks to Omnicom Group’s EnergyBBDO, Ad Age has learned.

The move, which came without a review, will shift the business handled by BBDO sibling Juniper Park in Toronto to Energy BBDO, the Chicago office of the BBDO global network.

Asked what was behind the agency change, Quaker spokeswoman Candace Mueller said, “As part of PepsiCo’s strategic investment and productivity initiatives, Quaker Foods & Snacks North America is moving to one global creative agency, Chicago-based Energy BBDO. Based on Energy BBDO‘s expertise for setting global strategy and developing breakthrough creative thinking, we believe they are the right agency to help Quaker accelerate our brand positioning worldwide. We sincerely appreciate the work that Juniper Park has done for the Quaker business and thank them for all of their efforts.”

The news comes on the heels of Quaker’s hiring a new top marketer. In January it named Justin Lambeth—a former Frito-Lay VP who led marketing for brands such as Lay’s, Tostitos and Sun Chips—CMO.

The move is a blow to Juniper Park, once a darling among Pepsi ‘s agency roster. Losing the Quaker business is another piece of bad news for the shop, which just a few months ago also lost PepsiCo’s Frito-Lay Sun Chips and Lay’s brands to Energy BBDO.

At that time, the agency still had Quaker as well as work for PepsiCo’s global nutrition group. But with the Quaker shift, Ms. Mueller said that “Energy BBDO will be responsible for setting Quaker’s global strategy and developing a global ad campaign in partnership with the Global Nutrition Group.”

It’s unclear whether Juniper Park will do any additional work for the global nutrition group. Frito-Lay was a founding client when Juniper Park opened its doors in 2007, and the agency picked up Quaker in October 2009.

PepsiCo last year spent about $53.6 million on measured media for Quaker, according to Kantar. It spent about $56 million in 2010, a sharp drop from that $80.5 million it spent in 2009.

The PepsiCo business on the whole probably accounted for most of Juniper Park’s business. Its other clients include Virgin Mobile, Delta Hotels and Canadian media company Corus Entertainment. Asked about the shop’s viability, a BBDO spokesman said that the Juniper Park “continues to operate in Canada as part of the BBDO Worldwide network.”

Energy BBDO has benefited from its sibling’s losses and has picked up activity on the new-business circuit. Last year, Energy BBDO picked up a sizable portion of the global SC Johnson account that was formerly at DraftFCB.

PepsiCo, which has a relationship with Omnicom Group, is known to play musical chairs with agencies in the Omnicom family, regularly shifting business from one shop to another. Quaker, for example, has shifted hands many times in the past five years. In 2008, PepsiCo handed Goodby Silverstein & Partners the Quaker account after it had been at Element, an Omnicom agency formed primarily to handle PepsiCo’s business. Then in 2009, PepsiCo moved the Quaker account to Juniper Park, and now it’s parked at a new agency once again.

PepsiCo has been trimming its roster of agencies. Last month, it said on the beverage side of its business that it would cut ties with more than 100 agencies.

9823: BBDO Not In A Good Mood.

Advertising Age reported on another example of Corporate Cultural Collusion involving Omnicom—except this time, it didn’t go the holding company’s way. The creative duties for the Arby’s account shifted from BBDO to CP+B without a review, likely fueled by a fresh CMO with previous ties to Burger King and the new AOR. Which leaves BBDO employees not in a good mood at all. But everyone else can rejoice in knowing they won’t have to continue hearing the annoying White dude sing, “It’s Good Mood Food!”

Arby’s Creative Shifts to CP&B Without a Review

New CMO Russ Klein Ditches BBDO for Shop He Worked With While at Burger King

By Maureen Morrison

Arby’s is handing its creative account to CP&B from BBDO without a review, Ad Age has learned.

The move comes just a month after the chain named former Burger King Global CMO Russ Klein CMO. During his tenure at Burger King, Mr. Klein shifted the creative account to MDC Partners-owned CP&B in 2004 and worked with the agency until his departure from the burger chain in 2009.

Omnicom Group’s BBDO won the Arby’s account in December 2010. Omnicom sibling Merkley & Partners had the Arby’s account before that. Arby’s media agency of record, Interpublic’s Initiative, will continue to handle media duties.

“BBDO’s work for Arby’s was exactly what the brand needed at that time,” said Mr. Klein, in a statement. “This transition is about where we are taking the brand and how we are going to get there. Our opportunity is to turn a great brand into a great business. We are building a brand that will be authentic, emotional and enduring, and I know that CP&B can get us there.”

Rob Reilly, partner and worldwide chief creative officer at CP&B, said in the statement: “What has always struck me about Russ is his huge passion and strategic acumen. We are thrilled to have the chance to partner with him and the team to restore the fervent love for the Arby’s brand.”

The sudden move is a gut punch for the Omnicom shop. Coincident with BBDO’s work on the Arby’s business, the fast feeder posted positive sales after a slump. After the chain appointed Mr. Klein, Arby’s Restaurant Group President Hala Moddelmog said in a statement that Arby’s had just completed its fifth consecutive quarter of same-store sales growth.

In a separate statement, John Osborn, president-CEO of BBDO, New York, said: “There’s not much to say. The numbers speak for themselves. We’re proud of our contributions to the Arby’s business. We wish the brand continued growth.”

Arby’s is expected to launch a new campaign and logo, as well as a new menu, in the third quarter of the year around the Olympics, but given the account change, it’s believed that CP&B will now be responsible for the work. BBDO created the current tagline “It’s good-mood food.”

Arby’s, now a private company, was part of Wendy’s/Arby’s Group until private-equity firm Roark Capital took a majority stake in the chain in July. Arby’s spent $111.7 million on U.S. measured media in 2011, according to Kantar.

9802: Propelling Shit On TV.

Last May, MultiCultClassics noted a clear case of Corporate Cultural Collusion involving Omnicom and PepsiCo, whereby the Propel Zero account shifted from one sister agency to another under the guise of formal reviews. The incumbent agency—Goodby, Silverstein & Partners—was ultimately replaced by the virtually unknown Fathom. This Propel Zero commercial from the new AOR is awful, and hardly on the caliber of what one might expect from GS&P. In fact, it appears to be a poor adman’s version of a campaign created years ago for the brand by another Omnicom agency.

9751: Corporate Cultural Collusion Kool-Aid.

Advertising Age reported that Kraft is shifting its Kool-Aid account from Ogilvy to Saatchi & Saatchi, citing the need for a “fresh perspective” on the brand. Right. First of all, everyone knows that minorities comprise a key audience for Kool-Aid (MultiCultClassics addressed this topic last year). So moving the work from one outdated White agency to another outdated White agency will hardly lead to freshness. Once again, Kraft is showing its commitment to supplier diversity is total bullshit. And the food company’s business sense—in terms of partnering with experts capable of sparking sales—is pathetic too. It seems like “fresh perspective” is code for Corporate Cultural Collusion.

Saatchi Snags Kraft’s Kool-Aid, Capri Sun

Marketer Cites Need for ‘Fresh Perspective’ on Beverage Brands

By Rupal Parekh

Kraft is once again rejiggering its roster, handing Publicis Groupe’s Saatchi & Saatchi creative duties for Kool-Aid and Capri Sun. Those beverage brands were previously handled by WPP’s Ogilvy.

Agency representatives either declined to comment or referred calls to Kraft Foods. Bridget A. MacConnell, Kraft ‘s senior manager-corporate affairs for beverages, told Ad Age that Saatchi’s New York office will be responsible for handling the two accounts and said the impetus was a desire for new creative thinking.

“While we appreciate our long partnership with Ogilvy, we needed a fresh perspective as we drive our refreshment beverage brands forward,” she said via email.

The pace with which Kraft continues to make changes to its agency roster is astounding. A Wall Street analyst recently found that between 2009 and 2010 Kraft had switched ad agency assignments on brands accounting for a whopping 48% of its total U.S. measured media spending.

The changes in the company’s agency relationships are part and parcel of a much larger wave of organizational changes at Kraft, which is in the midst of splitting into two companies—one focused on the North American grocery business, and another that concentrates on snacks. As a result of the split, Kraft has announced that it will slash up to 1,600 jobs. Meanwhile, the company is in the thick of ushering in a barrage of new products.

For Saatchi, the win expands its place on Kraft’s roster of agencies after winning creative duties last October for the world’s largest gum brand, Trident.

It also provides a continuation of some good momentum to kick off 2012, helpful on the heels of its late December loss of the JC Penney account after a five-year relationship. In the past month alone, Saatchi has picked up these additional Kraft assignments, a new creative assignment for the Sapphire credit card by Chase, and has been called in to help out on Miller Lite with a new brand campaign.

Between January and November of 2011, Kraft, which is the 32nd biggest national advertiser per the Ad Age DataCenter, devoted between $35 million and $40 million in domestic measured media to Capri Sun, and about $20 million on Kool-Aid, Kantar data shows.

For Ogilvy it means a further reduction of its Kraft business. The agency once handled a broad array of brands for the packaged-goods giant, but over the past few years it has gradually seen many of its Kraft accounts flee to other agencies. It continues to have two big global pieces of Kraft business, Tang and Cadbury chocolate, and also does work for Honeymaid graham crackers.

Contributing: E.J. Schultz

9706: Walgreens Review Is Rx For Comedy.

Adweek reported the creative portion of the Walgreens account is going into review. Can’t help but believe the upcoming competition will provide comedy galore. For starters, the incumbent agency, Downtown Partners, is an Omnicom unit. And everyone knows Omnicom is masterful at keeping unhappy clients in the network by serving up sister agencies as replacements. Second, Walgreens’ digital agency is Publicis Groupe’s Digitas, which recently “won” the Sprint account via old-fashioned cronyism. It all sounds like a prescription for Corporate Cultural Collusion.

Walgreens Reviews Creative Business

Annual media spend approaches $200 million

By Andrew McMains

Add Walgreens to the list of restless retailers.

The drugstore chain, which has more than 8,200 locations, has contacted agencies about its creative business via a request for information that’s due back next week.

The document asks agencies about their experience in retail, healthcare and with Fortune 500 companies. The RFI also identifies potential conflicts, listing Walmart, Target, CVS, Rite Aid and Amazon as direct competitors.

Walgreens spent more than $192 million in media in 2010 and about $164 million in the first 10 months of 2011, according to Nielsen. Those figures don’t include online spending.

The chain’s lead creative agency is Downtown Partners in Chicago, a unit of Omnicom Group. Publicis Groupe’s Digitas handles digital creative efforts. Calls to each agency and Walgreens were not immediately returned.

Not in play, according to the RFI, are media planning and buying (both traditional and digital), search engine marketing/optimization and multicultural efforts.

Other retailers who have reviewed or shifted creative business in the past three months include Radio Shack, JCPenney, Staples and Dick’s Sporting Goods.

Retail, of course, is among the business sectors hardest hit by the economic downturn, so the restlessness is understandable. As consumer confidence (and buying power) wanes, so do sales at many retailers. What’s more, many stores offer the same merchandise, which puts the onus on marketing to develop brand distinctions beyond the price points.

Last year, Walgreens developed its first national campaign for its namesake line of health and wellness products. The effort included TV spots, online videos, Web banner ads and blogging.

Walgreens posted a 6 percent increase in sales in 2011 to $73.1 billion. In December alone, sales grew nearly 3 percent to $6.98 billion, according to the Deerfield, Ill.-based company.

9697: Illinois Lottery Account Is Rigged.

Advertising Age reported the Illinois Lottery named new agencies to handle branding and digital duties. However, the new agencies and the ex-agency are all within the Omnicom network. So it looks like Corporate Cultural Collusion is the winning ticket.

Critical Mass, Downtown Partners Set to Win Illinois Lottery

Account Previously Handled by Energy BBDO

By Maureen Morrison

Omnicom siblings Critical Mass and Downtown Partners are set to pick up advertising duties for the Illinois Lottery.

The account was previously handled by Energy BBDO, which had originally won the Lottery account in 2009. It was put into review in November, less than six months after a private consortium, the Northstar Lottery Group (which included Energy BBDO), took over day-to-day marketing and management as part of a 10-year state contract. The lottery was previously run by the Illinois Department of Revenue, but the state put the management contract up for bid in 2010.

The unexpected move to conduct a review happened about a month after Michael Jones was named superintendent of the Illinois Lottery, the agency that oversees Northstar. Mr. Jones is not new to the Lottery, having run it in the 1980s.

Since Downtown Partners and Critical Mass are also owned by Omnicom, the account essentially stays within the same company. A number of Illinois agencies had been invited to participate in the review, with five making the cut for the second round of the review: Downtown Partners (which partnered with Critical Mass), sibling agencies DDB, Chicago, and Element 79; Interpublic’s DraftFCB; and WPP’s Y&R , Chicago, which opted out of the review. According to Northstar’s website, the decision came down to Downtown Partners and DDB. The Lottery is expected to keep Omnicom’s OMD on for media services. Energy BBDO did not participate.

“The caliber of work and strategic thinking we received during this selection process was off the charts impressive,” said Jessica Powell, VP-Northstar Lottery Group, in a statement. “We challenged agencies to radically redefine our brand and they delivered.”

Mr. Jones said in a statement that the Lottery “looks forward for ways to work closely with Critical Mass/Downtown Partners to maximize revenue to the state in an ethical and socially responsible manner.”

Downtown Partners did not return calls, Critical Mass could not be immediately reached and DDB did not comment.

According to the request for proposal, the Lottery typically spends “between 1.0%-1.2% of sales in advertising, production and related agency fees. The aggregate amount has ranged from $20M-$35M per year with the highest level during [fiscal year] 2012.” A person familiar with the business said the agency fee was an estimated $4 million a year.

Downtown Partners counts Walgreens among its largest clients. It also works with the Chicago Convention and Tourism Bureau. Critical Mass clients include Nissan and AT&T .

9642: 12 Predictions For 2012.

1. Corporate Cultural Collusion will enjoy an all-time high.

2. Team Sprint will make Enfatico look like Wieden + Kennedy.

3. Howard Draft may get his wish for running a small shop.

4. A White adperson will create a new minority scholarship program—and honestly believe it’s an original idea.

5. There will be no original advertising ideas presented during Black History Month.

6. Jeff Goodby will win an ADCOLOR® Award.

7. Donny Deutsch will continue to embarrass the industry—and never even realize it.

8. AgencySpy will continue to be the place where adpeople anonymously reveal their inherent racism.

9. Advertising Age and Adweek will devote more coverage to Miley Cyrus than Cyrus Mehri.

10. The Big Tent will fold.

11. “Where Are All The Black People?” will remain an unanswered question.

12. Summer’s Eve will launch a conservative coochie campaign.