Cannes 2016: Why Pepsi opened a content studio

Exec says New York facility could become a revenue generator

PRESENTED_BY_AOLIf things go Brad Jakeman’s way, PepsiCo’s marketing will one day pay for itself.

Since the company opened its own content studio in New York last month, it has not only been producing its own work, but also striking deals to sell its content externally.

Speaking at the Cannes International Festival of Advertising on Tuesday, Jakeman, president of the company’s global beverage group, said he sees potential for the studio to become a revenue generator, with an eventual goal of funnelling money from content sales back into PepsiCo’s marketing budgets.

While Jakeman said the studio is not yet a profit centre, he’s bullish about the possibility.

“I’ve been shocked how many media platforms are coming to us to ask us to produce content for them,” Jakeman said. “My ultimate goal is to have our billion dollar brands actually funding their own marketing.”

PepsiCo’s content studio was founded with the intent of making both branded and unbranded content and struck an early deal with AOL‘s Partner Studios, with which PepsiCo has plans to produce lifestyle and entertainment content for distribution on AOL and Microsoft properties.

Though some of the content the studio produces is unbranded, Jakeman also spoke in Cannes about how brands can create the type of projects that were once the exclusive domain of media companies. For example, he said he can imagine a behind-the-scenes look at the NFL produced by Gatorade or series showing how the Superbowl halftime show is put together produced by Pepsi.

As PepsiCo has moved to producing its content in real-time, the company has changed the way it works with agencies. In the past Jakeman has had some tough words for agencies, but he insisted Tuesday agencies still have a role to play in producing PepsiCo’s marketing.

“I don’t wake up every day wanting to disrupt the agency business,” Jakeman said. “I’ve been asking the ad industry now for years to evolve their model…they haven’t so we’ve done it ourselves.”

The company’s content studio, he said, is a complement to the work it does with agencies, not a substitution for it. “It’s not going to replace the agency. That’s a very salacious headline that’s been used often,” Jakeman said.

Instead, he said PepsiCo brands will continue to work with agencies on some projects, while the content studio will handle others. As the company adapts its content strategy, he said it is also striking new arrangements with individual content creators who work on a smaller scale than agencies.

The trend of marketers getting into the content business is already underway in Canada as well. Early this year, Cara launched an in-house content team to work on brands like Harvey’s and Swiss Chalet and L’Oréal Canada also opened an content studio in Montreal last November.


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