Dive Brief:

• PepsiCo has eliminated its global marketing procurement department in lieu of shifting responsibility to its individual brands, Ad Age reports.
• The shift in marketing will cost some jobs and will almost certainly affect PepsiCo’s agency relationships.
• Just last month Bradley Jakeman, president of PepsiCo’s global beverage group, told an audience at the National Advertisers’ Masters of Marketing conference the agency model was “going to break” citing changes in the content model that favor content producers over agencies.

Dive Insight:

A PepsiCo spokesman told Ad Age in a statement, "We continue to evolve our operating model to be more efficient and effective. These changes are made with careful consideration and are necessary for us to stay competitive while meeting the future needs of our business. Unfortunately, as a result of these changes, some positions have been impacted. These are never easy decisions but we are committed to supporting affected employees by offering severance packages and comprehensive career transition support."

The announcement is one more piece of a bad year overall for agencies and their big brand relationships. This year more agencies were put under review by brands than the last three years combined with marketers looking for better deals from their agency relationships and media deals.

The move might have been telegraphed by Jakeman’s presentation the National Advertisers’ Masters of Marketing where he also said, “Agencies will continue to see more and more projects leaving them. They will get a smaller and smaller share of the pie.”