Pepsi official blasts ad agencies for poor innovation, causing disconnect with consumers

The rising disconnect between the aspirations of consumers and the promotional messages of products had its echo at a recent advertising conference in the US.

Top PepsiCo executive Brad Jakeman hit out at advertising agencies for lagging in innovation and sticking to the status quo. Speaking at the Association of National Advertising's annual "Masters of Marketing" conference in Orlando, Jakeman said the time has come when the very phrase "advertising" needs to be dumped by the wayside, Ad-age reports. The event was attended by 2,700 marketing and agency professionals.

“Can we stop using the term advertising, which is based on this model of polluting content," he asked.

Stagnant agency model

Jakeman, president of PepsiCo's global beverage group, in his talk "Designing for Disruption," reserved his toughest words for ad agencies.

“The agency model that I grew up with largely has not changed today,” he said. “Yet agency CEOs are sitting there watching retainers disappear. They are looking at clients being way more promiscuous with their agencies than they ever have."

Jakeman also took the ad industry to task for its lack of diversity.

“I am sick and tired as a client of sitting in agency meetings with a whole bunch of white straight males talking to me about how we are going to sell our brands that are bought 85 per cent by women," he said. He then added that “innovation and disruption does not come from homogeneous groups of people.”

FTC refuses probe

Meanwhile, the Federal Trade Commission rejected a consumer group's appeal to probe Coca-Cola, Pepsico and other manufacturers for “falsely advertising” that artificially sweetened soft drinks and food products are helping people to lose weight.

The decision of "no probe" is a relief to the soft drink industry, which is already beset with flagging sales even for the diet drinks.

The petition was filed by the group “U.S. Right to Know” in April, asking the FTA and the U.S. Food and Drug Administration to restrain companies from branding their products with the word "diet" if they contain artificial sugar substitutes like aspartame, the widely used sweetener.

Gary Ruskin, executive director of U.S. Right to Know, was informed by the Federal Trade Commission that while the petition was “carefully considered,” upon review it decided not to take additional action at this time.

The letter was written by Mary Engle, the agency's associate director for advertising practices.

“We considered a number of factors related to resource allocation and enforcement priorities, as well as the nature of any FTC Act violation and the type and severity of any consumer injury," Engle disclosed.

In its response, the FDA advised the consumer group on Sept. 22 that it needs more time to consider the complaint, reports Bradenton Herald.

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