A view from Claire Beale

Pepsi's portent for adland

PepsiCo has been giving tours of its new content studio in New York.

Let’s be clear. This Creators League lab is not a converted back office with a few extra knobs and strobes. This is 4,000 square feet of SoHo real estate and it’s a vision of the future that could fundamentally disrupt your business.

Designed by John Storyk, who’s created studios for Jay Z and Springsteen, the sparkling facility has a full-time staff of engineers and creatives, a massive state-of-the-art recording studio, editing and production suites, a luxury screening room and a green room with on-tap Doritos and, yes, Pepsi.

Don’t choke on your Cheetos, but PepsiCo could soon be making its own commercials. Oh, sure, it says not. Sort of. PepsiCo chiefs reckon most of what the lab creates will be non-branded, just great content that can be sold to TV networks, so generating revenue that can then be ploughed into the marketing budget and spent on media and advertising. You have to admit that’s one neat virtuous circle if you’ve got the brands and clout to pull it off.

There’s a joint-venture deal already signed with AOL to create a range of popular programming – some branded, some non-branded – that will run on AOL and Microsoft platforms. And a feature film is in the pipeline – dubbed "an urban Pitch Perfect" – in collaboration with production company The Firm.

None of this will surprise delegates at last year’s Association of National Advertising’s Masters of Marketing conference, where PepsiCo’s Brad Jakeman said that the industry should junk the word advertising altogether because it refers to a model based on polluting with unwanted commercial messaging.

Jakeman has made no secret of his frustration that agencies aren’t more innovative, but he reckons they shouldn’t be worried about the whole studio concept because he still values his agencies for their "upstream brand stewardship". Which sounds a bit like what he really wants them for is the strategic thinking bit without the creative execution.

But will agencies actually benefit from PepsiCo successfully selling its own content? Will they benefit from increased marketing funds being ploughed back into quality advertising and media? That’s not so clear. The trouble is proliferation of platforms has given marketers the opportunity to flood the web with cheap, fast-turnaround content – there’s no doubt that PepsiCo’s studios will be busy churning out a lot of brand-related material. Not necessarily ads, but you know…

The studio certainly symbolises the ongoing (financial) threat to agencies’ management of their clients’ production processes. It also challenges the nascent in-house production businesses agencies have been developing themselves. More dramatically, it’s another bell toll for the independent production industry. And once that goes, agencies and marketers alike will be the poorer.