PepsiCo Exec Fears the Agency Model Won’t Bend, but May Break

Says shops aren't changing with the times

Headshot of Katie Richards

The president of PepsiCo's global beverage group says ad agencies have not successfully kept pace with changes in the marketplace and fears the current model won't last much longer. 

"The agency model is not going to bend—it's going to break," Brad Jakeman warned attendees at the Association of National Advertisers' Masters of Marketing event in Orlando. "This is a disruption that has happened around us, and we are still talking about 30-second television ads. We fundamentally haven't changed."

Jakeman argued that agencies are stuck in a mind-set from more than 20 years ago, when creating four pieces of content a year, each taking about four months to make, with a budget of $2 million—in other words, big-budget TV spots—was normal. Nowadays, brands are pushing out more like 400 to 4,000 pieces of content a year on a $20,000 budget. 

"The big kind of global alignment agency is a dinosaur concept," Jakeman said. "The big issue is are we as an industry, on both the agency and the client side, structured to be able to deliver this?"

The PepsiCo executive attributed some of the sluggishness to what he believes to be outdated language still being used today. "The language in the industry actually defines our behavior," he said. "Let's stop, as an industry, talking about 'digital marketing.' Let's start talking about marketing."

As a starting point for evolving the agency model, Jakeman said people should stop using certain terms, including "agency" and "advertising," that keep the industry mired in the past. 

@ktjrichards Katie Richards is a staff writer for Adweek.