Forget the Jets and the Sharks, the Yankees and the Red Sox, or Arsenal versus Spurs (on my side of the pond). Few rivalries run as deep as Coca Cola and Pepsi.
That explains why Madison Avenue was so stunned by last week’s news: Publicis Groupe had won PepsiCo’s $1.7 billion global media, data and technology account without a traditional pitch. (Omnicom was Pepsi’s global media partner for more than 25 years, although Publicis media agencies already worked with the beverage and snack giant in some Asian markets.)
The context: Publicis manages Coca-Cola’s media in North America – and competed with incumbent WPP for Coca-Cola’s global business.
“I was stunned and shocked all week,” one marketing consultant told me. Another sent me an unprintable expletive.
Two people familiar with the matter told me that Publicis has pulled out of Coke’s global pitch and is about to drop the North American bill — a company it acquired from WPP last year. According to research firm COMvergence, the value of Coca-Cola’s North American operations is estimated at $805 million, while its global operations represent $1.8 billion in expenditures.
AdAge reported on Tuesday, Coca-Cola announced that Coca-Cola now plans to revisit its North American media operations.
Publicis’s coup is widely seen as a masterstroke Arthur Sadoun’s companywho similarly reached Microsoft’s media operations in April without a formal pitch. It also shows how the consolidation of the agency landscape is changing the capabilities of CMOs, especially for marketers who demand category exclusivity.
The Review Culture of Madison Avenue
When Coca-Cola confirmed its global media assessment in June, Pepsi’s marketing team quickly seized the opportunity to strike before it was too late.
If Publicis had won Coca-Cola, Pepsi would have had few obvious alternatives to keeping Omnicom as a global media partner. WPP and Publicis’ relationship with Coca-Cola would have made these agencies off-limits Omnicom’s acquisition of IPGas well as Dentsu’s international struggleleft few other large-scale global media operations in the market for a company of PepsiCo’s size.
“Top-to-top dealmaking is becoming increasingly common when running a process with guarantees on people, rewards and media costs,” says Ruben Schreurs, CEO of marketing consultancy Ebiquity. “Is this a sign of things to come?”
It is an embarrassing blow for Coke, which had expected to convene the leaders of Publicis and WPP in Mexico City this week in the final phase of the global media pitch. Only WPP made it.
Reviews are expensive and time-consuming for both agencies and clients: executives from WPP and Publicis had already flown to Shanghai and London as part of the process.
Some major global advertisers consider these lengthy processes necessary as they make important decisions about which agencies are best equipped to handle their billions of dollars in ad spend. It’s not just about which agency has the most convincing pitch and charismatic leaders in the presentation room. Advertisers and their buying teams can spend months and even years negotiating prices, the top people assigned to their accounts and testing agencies’ capabilities in areas such as data, technology, commercial media and, increasingly, AI. Volkswagen’s global media overview memorably stretched over three years before reappointing Omnicom’s PHD in 2024.
Given the complexity such reviews entail, industry insiders said they were surprised that Publicis’ move came when the Coca-Cola review was in full swing.
“It couldn’t have been more shocking in a more shocking category with two more shocking brands at a more shocking point in the process,” one agency head told me.
