Beyonce Lands $50 Million Deal With Pepsi

….Pepsi to collaborate on Diva’s projects

Beyoncé has signed a $50 million promotional deal with Pepsi, The New York Times reports. At some point after her Super Bowl XLVII halftime performance on February 3rd (of which Pepsi is a sponsor), the singer will appear in a new TV ad for the soft drink, which will also feature her face on a limited-edition run of soda cans. The deal will also involve sponsorship of her tour next year (Beyoncé is expected to release a new album at some point in 2013), along with a multi-million dollar fund for Beyoncé's creative projects, even if they have no obvious connection to Pepsi. Lee Anne Callahan-Longo, general manager of Beyoncé's Parkwood Entertainment, said those collaborative projects could include live events, videos or "a cool photo shoot," but are still at the early stages of development.

“Pepsi embraces creativity and understands that artists evolve,” Beyoncé said in a statement. “As a businesswoman, this allows me to work with a lifestyle brand with no compromise and without sacrificing my creativity.”

The campaign will coincide with a blitz of promotion for her next album, which has no title or release date so far but is expected in 2013. Sometime after she performs at the Super Bowl halftime show on Feb. 3 (also sponsored by Pepsi), Beyoncé will appear in a new TV ad — her fifth for the soft drink since 2002 — and her face will be on a limited-edition line of soda cans.

The less conventional aspects of the deal are meant as collaborative projects that indulge Beyoncé’s creative whims, and might well have no explicit connection to Pepsi products. They are still at the brainstorm stage, but could include live events, videos, “a cool photo shoot” or almost anything else, said Lee Anne Callahan-Longo, the general manager of Parkwood Entertainment, Beyoncé’s company.

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.

“Consumers are seeking a much greater authenticity in marketing from the brands they love,” said Brad Jakeman, president of PepsiCo’s global beverage group. “It’s caused a shift in the way we think about deals with artists, from a transactional deal to a mutually beneficial collaboration.”

The multiyear campaign is estimated at $50 million, the bulk of it for media placements and promotions around the world, and the remainder split roughly equally between Beyoncé’s fee and what Pepsi calls a creative content development fund.

According to the tracking firm Kantar Media, PepsiCo and its archrival the Coca-Cola Company each spent about $148 million in the United States to advertise their soft drink brands in the first six months of 2012, across all measured forms of media, like television, print, digital and radio.

Over the last decade many consumer brands have been taking more active roles with artists, particularly in pop music. Converse, Red Bull and Toyota’s Scion line, for example, have become as familiar in the music business as any label or concert promoter by paying to help create and promulgate music.

Bands always risk fan disapproval when shaking hands with big corporations. But with record company budgets diminished, Madison Avenue money is often seen as essential. PepsiCo has been part of this trend through Green Label Sound, a label financed through its Mountain Dew drink, which over the last four years has paid to release free music by under-the-radar groups like Matt & Kim and the Cool Kids.

“We recognize that there have been massive disruptions in music industry: lower investment in artist development, fewer points of distribution, financial constraints,” said Frank Cooper, a top marketing executive in PepsiCo’s beverage division who has been a force for such projects. “We look at those disruptions as opportunities for Pepsi.”

These deals are not limited to music. In 2010, Jay-Z (Beyoncé’s husband) teamed with Microsoft to promote his memoir, “Decoded.” According to a case study led by Anita Elberse, a Harvard Business School professor, the publisher could contribute only $50,000 for marketing, but Microsoft paid $2 million for an elaborate scavenger hunt that promoted the book as well as its new search engine, Bing.