Shops Expand Their Horizons

This past summer, PepsiCo gathered 150 brand managers for a two-day “summit” at its Purchase, N.Y., headquarters. The meeting was to evaluate 20 emerging media startups that conceivably could help the soft drink and snack food behemoth better market its products. During the meeting, attendees selected 10 of the startups to work on pilot projects for the company.

The gathering’s execution was credited to the company’s media agency, Omnicom Group’s OMD. Now, however, OMD has revealed that the effort was conducted by a new unit, vc@OMD, established this past summer to identify bleeding-edge emerging-media platforms and their developers, and then help those platforms devise offerings that advance the strategies of OMD clients and other marketers.

Other shops are on the case as well. Interpublic’s Mediabrands is set to reveal details this week of an offering that is “similar in spirit” to the vc@OMD practice, a company rep confirmed. And Publicis Groupe’s VivaKi has had a similar practice for several years (known informally as the “ventures” unit).

Sean Kegelman, who oversees the VivaKi effort as svp, digital media partner, development, says its benefit to clients is that it focuses on ventures that “really scale and plug into our core platforms.”

The Pepsi/vc@OMD summit was the culmination of a year-long effort by the marketer. Its goal had been a blueprint that would enable it to systematically track the latest technologies and platforms in the media sector, as well as the entrepreneurs driving those developments in the emerging-media space.

The next step in the Pepsi project: matching each of the 10 companies with an internal Pepsi team and defining exactly what each of these companies will do to help market one or more products. The activation of the plans is set for Q4 2010 or early 2011, according to Seth Kaufman, director, media strategy, PepsiCo North America Beverages.

Kaufman noted that the vc@OMD offering is a prime example of how media shops have to expand beyond just planning and buying if they hope to be key strategic partners to their clients going forward.

“Media agencies sit in one of the most interesting places because they’re closest to the explosion of platforms all over the media landscape,” said Kaufman. “Agencies that don’t build a capability like that are going to have some problems.”

Paul Leys, director of OMD’s Ignition Factory unit, oversees vc@OMD, and was the agency’s point man on the Pepsi project.

“It’s about finding the next Foursquare or Twitter,” said Leys. And finding them early. It took OMD (before its new unit was formed) only five days to connect with San Francisco-based Miso, described as a Foursquare-like social media site for TV show fans, after the service launched in March. After a series of meetings, OMD got Miso involved in the Pepsi project and the company wound up being selected as one of the 10 emerging-media pilot programs.

“We see [vc@OMD] as a strategic partner who can help us think about how we can grow our business,” said Miso CEO Somrat Niyogi. In return, he said, “as we come up with new ideas, their clients get the benefits very early on.” Of course just how big a payoff Pepsi gets from the pilot projects remains to be seen. But at least, according to Kaufman, the company has devised a winning formula for evaluating new media.

“Walking out of the summit there were things I was thinking about differently just being a part of it,” Kaufman said. “We’re absolutely committed to this type of thing” going forward. Some new platforms will flop and others will succeed, he added. For the latter, “we’ll find a way to bring them into the company,” he said.