‘Certainly a disappointment’: Omnicom CFO’s verdict on losing PepsiCo to Publicis

“The Pepsi situation is an unfortunate one,” he said. “It’s certainly a disappointment from our perspective — you cannot sugarcoat it.” 

The comments all but confirm that this move blindsided Omnicom’s execs. Holdco bosses like Angelastro usually see this kind of switch coming. Sources with knowledge of the matter said his team didn’t, and has spent the past week trying to work out why. Why would PepsiCo after all those years walk away from Omnicom without even giving it the chance to fight for it? Speculation has been rife. Was it because PepsiCo’s CMO had a relationship with Publicis in a previous role? Or maybe the advertiser simply wasn’t impressed with whatever Omnicom was pitching in the wake of the IPG acquisition.

Whatever the reason, Omnicom will want it nailed down fast. 

“We are doing a detailed kind of deconstruction of how it happened and what we should have been doing differently to prevent it from happening,” Angelastro said at the conference. “We are not completed with that process but we are going to learn some lessons from this, and certainly we are going to take them very seriously.”

In short, he said the holdco isn’t looking for excuses during this analysis. The aim, Angelastro continued, is to do a root cause analysis so that we can improve the business and our processes going forward.” That matters most for holding onto what’s left of the PepsiCo relationship since Omnicom still handles the company’s PR, creative and some sports marketing. 

It could also help the holdco get ahead of other CMOs who might be watching PepsiCo’s move and wondering if they should follow suit. Those clients will want to know what happened and whether it changes anything for them. Needless to say Angelastro has some tough questions in the weeks ahead. 

“We don’t think it’s going to have a significant impact on the business going forward when we get to 2027 and our expectations,” the ad exec said. “There is still quite a bit of time between now and ‘27 and we will be aggressively pursuing new business as we always do.”

His confidence lines up with the numbers, even if the underlying figures come from outside estimates rather than Omnicom’s own disclosures. According to ComVergence, PepsiCo’s core global media spend sits at roughly $1.8 billion. Madison and Wall estimates Omnicom’s actual fee revenue from that business at closer to $100 million, a fraction of the headline figure, against a company running a 21% EBITA margin. That’s an abosrbale hit on the holdco’s bottom line based on the numbers available. The exposure that is harder to model is reputational – more than 25 years with a client, Apple, Renault-Nissan, McDonald’s and several others all running on the same kind of long, unreviewed relationship Omnicom just watched come apart. 

Whether that means Omnicom goes after Coca-Cola’s media business, which is now in play following Publicis’ decision to relinquish its North America media account and back out of contesting the rest of it after the PepsiCo deal remains to be seen. If it is, Angelastro offered scant detail. 

“We value the relationship [with PepsiCo] but certainly there will be a little but more flexibility in terms of what we pursue in the future.”