Future of Marketing Briefing: One more helping, for gluttons still hungry for Publicis and PepsiCo takes

It’s been known for a while that Publicis was operating on a different level to its rivals but the decision is arguably the clearest articulation of that so far. If PepsiCo were a mid-tier account, skipping the pitch would just be a client taking a shortcut. In reality, however, it’s one of the largest — worth around $1.7 billion. At this size, on a rival scale to Coca-Cola, no pitch means the market’s two biggest advertisers both gave serious thought to handing Publicis this kind of money. One did, on trust alone. 

“I’ve been on billion dollar pitches and they’re one of the most painful experiences on earth for agency execs,” said Patrick Ryan, a former Omnicom exec, who now runs 300, a specialist growth consultancy for agencies. “The ability to be able to do what Publicis did without a pitch is impressive because the cost savings (both money and people) there are absolutely vast.”

Every rival network watching this wants its own version of the story — the account that arrives without a fight because the client was sold on the pitch hook, line and sinker. But wanting it doesn’t make it happen. Holdco bosses have to earn that kind of trust themselves, and that’s less about how many capabilities they have to offer and more about how convincingly they get knitted together. Publicis has cleared that bar in a way nobody else currently has, to the point where it may not need to pitch for the accounts that matter most. Microsoft already moved its estimated $700 million global media planning and buying business from Dentsu to Publicis earlier this year. Coke did something similar a year ago when it gave Publicis its ad dollars in North America. Add the six major pitches Publicis CEO Arthur Sadoun said the group walked from in the first half of the year, and neither number would be surprising to see climb further before December. This is Publicis’ imperialist era.

Being imperial also means being pragmatic

The deal reads as opportunistic on its face. But that framing undersells the calculation Sadoun and his team clearly ran before committing to it. After all, Coca-Cola was an account he had coveted for years, going so far as to win its massive North American media and data business from WPP last year. Going head-to-head with the British holding company in a fierce, two-horse global shootout earlier this year put Sadoun about as close to capturing the crown jewel as he had ever been. Walking away from the MediaSense-managed pitch at that exact moment takes some explaining.

So here goes: the closer Publicis got, the clearer it would have become that the global business came with operational strings it couldn’t easily cut. Following Coca-Cola’s massive agency overhaul in 2021, WPP became the beverage giant’s primary global marketing partner. To handle that vast remit, WPP built — and continues to operate — OpenX, an entirely bespoke agency and operating system hardwired directly into Coca-Cola’s infrastructure.

Because WPP still controls the vast majority of Coca-Cola’s global creative work, production studios, and digital asset libraries, they retain a structural lock on the client’s day-to-day operations. Had Publicis won the global media dollars under that model, its own unified tech stack would have spent years awkwardly plugging into and chafing against a rival network’s underlying software. That friction is especially hard to swallow when it compromises the highest-margin facets of modern agency revenue: data orchestration, platform licensing, and software-as-a-service fees wired directly around a client’s first-party data.

Control was always the real prize

If billings were the whole story, walking from Coca-Cola for a net gain of roughly $400 million makes no sense. Here’s why: Publicis already held around $600 million of PepsiCo’s business through an Asia-Pacific win 18 months earlier, so that portion isn’t new revenue, it’s already on the books. Subtract that from PepsiCo’s core global media spend of roughly $1.8 billion, per ComVergence, and the genuinely new business comes to about $1.2 billion. Sodastream adds another $150 to $200 million to the wider PepsiCo relationship, but sits outside that core calculation. Against the $1.2 billion, Publicis is giving up the $800 million Coca-Cola North America account it won from WPP only a year ago as part of the same move. Net the two out and the real gain lads around $400 million — a fraction of the $1.7 billion headline attached to this deal. 

Which is to say this was never about media dollars. It was about control, instead. By bundling media, identity and technology under a unified mandate, PepsiCo hands Publicis complete ownership of the platform layer — the data orchestration, the proprietary SaaS tooling and the high-margin enterprise fees that a standard media buying commission never captures. Coca-Cola’s Open X system was structurally designed to withstand that lucrative software layer from outside agencies. By walking away from Coke to accept a smaller headline number on paper, Publicis revealed what it actually values: the uncompromised control of a client’s digital infrastructure.

At this level, relationships are key

Of course, capabilities matter and knitting them together matters even moreso. But none of it is enough on its own to push a CMO to turn its back on a holdco without a pitch — let alone one it’s stuck with for more than 25 years. That part comes down to people. 

Jane Wakely, evp, chief consumer and marketing officer and chief growth officer, worked with Publicis in a previous role at Mars. She didn’t need a capabilities deck to know what Publicis could deliver, she’d already watched it happen. That kind of trust can’t be matched by a rival’s tech stack or undercutting on price. It’s built over years, in a different job, on a different account, long before PepsiCo’s business was ever in place. Which is presumably why it only took one capabilities meeting, according to a source with knowledge of it, to decide the holdco was up to the job. 

It also wasn’t a call Wakely got to make quietly. Putting a 25-year incumbent up for replacement without a pitch meant making that case internally, to a CFO who’d want to know what was actually being bought and to a CEO who’d want to know why the safer, more conventional route wasn’t good enough. Wakely staked her own reputation on the answer being Publicis, with no competitive process to point to if it went wrong.

No, this isn’t a sign of the times

The pitch isn’t going the way of the dodo anytime soon. It’s too important strategically and commercially for most CMOs and their procurement teams to walk away from. What’s changing is who gets to skip it. Trust built over years — the kind Wakely brought over from Mars — buys an exemption most CMOs don’t have in their agencies. Without it, the pitch is the only mechanism that justifies a decision this size to a CFO who wasn’t in the room when the relationship was built.

A door closes for Omnicom, as another opens

Omnicom’s exposure here goes beyond a number on the balance sheet. On a net revenue basis, Omnicom runs a healthy adjusted EDITDA margin, comfortably enough to absorb a $400 million revenue loss without much financial drama. What’s harder to absorb is the question it raises everywhere else. 

PepsiCo was Omnicom’s account for more than 25 years — exactly the kind of relationship the American holdco built its reputation on retaining. Apple, Renault-Nissan and McDonald’s sit in the same bracket, decades-long deals that have never gone through a competitive review. None of those clients needed a reason to ask questions before. They have one now, whatever the eventual answer turns out to be. 

But there’s an opening too. With Publicis stepping back from Coca-Cola’s global revenue, Omnicom becomes a credible contender for business it wasn’t seriously competing for a month ago. Whether that logic appeals to Coke as much as it does to Omnicom is a different question, and that won’t resolve for a while yet.

What we’ve heard

“I would say it is early days there [on invoicing clients for token costs]. There is not much of that yet. There is not actually much of a meaningful increase in token cost overall at the business. There is some. It is something that we certainly are discussing in meetings on a regular basis to come up with a model that makes sense for us and for our clients and the process and controls that we need in place to manage those token costs and then to measure them. To get reimbursed for the additional cost to deliver what we do, there are a number of moving costs in that model. Ultimately, we are going to move towards a more output-driven model from a revenue perspective. We think that will be a long-term positive in the end.”

— Omnicom CFO Phil Angelastro said at the Goldman Sachs’ Communacopia + Technology Conference

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