PepsiCo: 'It's not about in-housing. It's about upskilling'

PepsiCo: focusing on upskilling marketing team
PepsiCo: focusing on upskilling marketing team

Company claims it has a 'marketing team that is suited for the digital age'.

PepsiCo’s media chief has called on others to seize control of media buying to better understand a digital market plagued by questions over value and transparency. 

Josep Hernandez, senior director of media and total connections planning at PepsiCo, told the Programmatic Pioneers conference in London today that the industry is being held back by siloes and short-term concerns about "the threat of in-housing".

"It’s not about in-housing. It’s about upskilling and building capability internally, so you can get greater control of your advertising spend," Hernandez explained. "Instead of having a digital marketing team, we have a marketing team that is suited for the digital age."

The rise of programmatically traded media has helped to erode trust between marketers and the online ecosystem in recent years because of concerns about ad viewability and fraud. Trust between advertisers and their media agencies fell to a two-year low last year, according to ID Comms. 

Panel: Phil Duffield, managing director of Adobe (chair), Richard Brooke, global media operations director at Unilever; Schulte; Hernandez; Ben Walmsley, commercial director at News UK; and Chester

That is why, Hernandez said, PepsiCo has begun marketing programmes like "buy your own media" (modelled on "bring your own beer") in which marketers are encouraged at least once a year to sit on the agency’s trading desk and demand to be shown "what it takes" to serve an online ad. 

This programme is not about a lack of trust between the brand owner and its agency, Hernandez added, but about "building capability" and to better understand what value the media agency brings to the table. 

He said: "It’s about us and building capability, about what does it take to serve an ad and what is the job of a media agency? You’re squeezing payment terms, you’re squeezing digital fees, you’re squeezing remunerations. You’re going over contracts, but something’s got to give."

Using blockchain technology in online media trading – something that would theoretically enable real-time auditing – was discussed frequently at the event with mixed enthusiasm.

Henrik Schulte, head of procurement for media and digital at Swarovski, was sceptical that using blockchain in online media buying would become a reality. "The ledger on the demand side and the sales side… there are regular meetings between the two trying to figure out what they can charge. But putting that in real time in a blockchain is going to be a challenging undertaking." 

ISBA’s director of media, Steve Chester, was more optimistic and cited work that Jicwebs was doing, adding that it was important to move to a system of being "always on" when it comes to online media buying.

"You don’t need to see people’s P&L. But this idea that we can’t discover anything is nonsense," Chester said. "In any supply chain, you should be able to audit that supply chain and [for] people [to] be prepared to have common strandards."

The problem, he noted, is that ad-tech specialists are often "VC-backed and looking at maximum profit in a short-term time frame". 

Chester continued: "People should be prepared to say ‘That is the value I add’ and we need people to put their heads above the parapet instead of settling for mediocre and saying: 'I’ll change when the other person changes.'"

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