Brands As Patron of the Arts: Pepsi’s New Deal with Beyonce

Pepsi has signed a $50 million deal with Beyonce that will include a traditional spokesperson arrangement, as well as creating a fund to support “creative projects” that may have nothing to do with Pepsi products or ads. From the NY Times:

The less conventional aspects of the deal are meant as collaborative projects that indulge Beyonce’s creative whims, and might well have no explicit connection to Pepsi products…. For Pepsi, the goal is to enhance its reputation with consumers by acting as something of an artistic patron instead of simply paying for celebrity endorsements.

Senior Pepsi marketing exec Frank Cooper positions the deal (and others like it) as a new model to fund artistic expression in an era where record labels are less likely to foot the bill. Musicians have a new source to fill the coffers, and brands benefit from the association.

We recognize that there have been massive disruptions in music industry: lower investment in artist development, fewer points of distribution, financial constraints. We look at those disruptions as opportunities for Pepsi.

Five hundred years ago Pope Julius II paid Michelangelo’s rent and enlisted his talents to help sell Catholicism — and we all benefit from the lovely paintings. Maybe our great great great grandchildren will thank Pepsi for bequeathing them with a few more Beyonce albums.

In the meantime I wonder what kind of impact these deals have on our affinity for a brand. On the one hand, the PR benefit probably pays for deal — just like Intel’s press bonanza justified its deal with Will.i.am, and Polaroid its deal with Lady Gaga. And perhaps a little something extra is just what it takes to land an endorsement deal with Beyonce-level talent: If you believe the association with Beyonce is worth $60 million, and the endorsement deal adds up to $45 million, who cares about another $5 million tossed into a “creative whims” fund? But it’s pretty hard to imagine how that creative projects fund will pay back Pepsi’s investment among this generation of soda drinkers.

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