P&G and Pepsi Agree on One Thing: 'There's a Lot of Crap Content'

Top marketers at Procter & Gamble Co. and PepsiCo agree on one thing: "There's a lot of crap content out there," as P&G Global Brand Officer Marc Pritchard put it. But in an unusually blunt and often funny panel discussion on the Cannes Lions Beach hosted by the Economist on Tuesday, they parted ways on some key industry issues – such as the role of procurement.


Marc Pritchard Credit: Procter & Gamble Co.

One point of possible overlap: PepsiCo President-Global Beverage Group Brad Jakeman wants his new content studio to make stuff so good media companies will pay for it, helping bankroll brands' marketing budgets. Mr. Pritchard has no desire to open a content studio and prefers to call what he does advertising, but he'd be happy to buy ads on Pepsi's programming if it's good.

Mr. Pritchard included some of P&G's own content in the "crap" category, including a graveyard of too many videos with "three or four views."

Mr. Jakeman reiterated some of the dissatisfaction with ad agencies outlined in an October Association of National Advertisers conference address. But he did say that because agencies' biggest beef with his company had to do with procurement increasingly running the relationship, PepsiCo essentially disbanded marketing procurement and put the job back in the hands of brand managers.

Brad Jakeman Credit: PepsiCo

"The quality of the dialog we had with our agencies was exponentially improved," Mr. Jakeman said. "They saw us responding to an issue they had and understanding that they had to make money."
Clients often act like "agencies are these not-for-profit CSR organizations," he said. "We don't realize that for the most part they are held by publicly traded companies just like ours. They have margin commitments to hit just like we do." Their natural response to fee cuts it to put more junior people on the accounts, he said.

Mr. Pritchard, asked by an audience member about the fairness of marketers stretching out payment terms to agencies to as long as 120 days (P&G is now at up to 75), drew laughs when he said: "I'd like to let procurement handle that one."

More seriously, he said the payment terms should be considered in the broader context of the full value of deals with agencies. Mr. Jakeman, even sans procurement department, said it's important to distinguish small and possibly cash-strapped individuals working with his new content center from huge agency holding companies on the payments issue.

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