PowerPoint Presentation

Ashwin Nathan Sr. Director, D3 Studios & E-Commerce

For the first time , we now have a consumer base that spans five generations. Whats even more amazing is that we can now talk to each of these generations in a very personal way that is relevant for them. Today, I am going to focus on Millennials and Genz, combined they make up 2/3rds of our base. 2

MILLENNIALSOPTIMISTENTITLEDMULTICULTURALTECH PIONEER

RAISED BY IDEALISTIC BOOMERSTHE WORLD IS YOUR OYSTER GEN ZREALISTSELF-RELIANTBLENDEDDIGITAL NATIVE

RAISED BY PRAGMATIC GEN XersMAKE YOUR OWN OYSTER

Both these generations have grown up having an intimate relationship with tech. Technology is their universal language, its broken down geographic, cultural and language barriers.

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NO TO MARKETING,YES TOCONVERSATION

And both of them share a disdain for marketing. They dont want to be lectured. They can smell something fake from a mile away. They want authenticity. They want a relationship. They dont want to just buy you, they want to buy into to you.

WE AS MARKETERS MUST LEARN HOW TO JOIN THE CONVERSATION

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DON DRAPER IS DEAD

Gone are the days where eat skittles and M&ms in dark rooms watching focus groups, and take six months to launch a campaign. Whats scary is we used to run this campaign for another six months, with no real back up plans if the campaign bombs because we spent too much making it. This dosent work anymore. We need to build new muscles to react quickly, to adapt and create on the fly, to distribute content in real time. 5

Walled Gardens Are Dead

Marketer

Consumers

Creative Agency

Media Agency

Networks

In the past, in order to reach your consumer, you had three layers of organizations you had to go through. First you had to work for weeks with your creative agency, then another week or two to traffic, and hope that the network approves it, before the consumer hears your message. Oh, and there is no feedback loop. It was a one way conversation. 6

Technology Has Enabled Alternative Models

Marketer

Consumers

Creative Agency

Media Agency

Publishers & Networks

Tech Platforms

Publishers

In the last few years, this dynamic has shifted. Platforms with tremendous scale have realized they can add even more value by offering data insights & creative services tailored to their platform. I can work with Amazon to create ads based on Amazon shopper insights. I can work with Facebook on concepts based on user insights and distribute the content in near real time. What used to take months now takes a few weeks to go from insight to creative to media live. Its not just the big social platforms offering this model. You have major publishers who now offer data, creative and near real time distribution. Technology has enabled an alternative way to reach out consumer this new way faster and more cost efficient. 7

MARKETING TECHNOLOGISTMARKETER

2006-20092010-20142015Software Is Eating Marketing

So in 2014, we stared our own evolution, and laid out a goal to transform our marketing department from marketers to marketing technologists. . We now live in a world of always-on data.We needed to build new capabilities that enabled us to take advantage of this data and turn it into insight? How could we apply this insight to strategy and create amazing content? How could we do this faster and cheaper, but most importantly unlock business growth? 8

Leverage data, creative and cutting edge technology to deliver engaging, immersive and personalized consumer experiences.

Demand. Design. Digital.

Our answer is D3. D3 stands for Demand, Design and Digital. Demand stands for our proprietary demand science data, which helps us understand why consumers consume and buy what they do. for example, beyond our direct competitors, we look at who else is competing for our consumers dollars for a snack. For Cheetos, that dollar could go to either Cheetos, M&Ms, Oreo or Goldfish. Design is about ensuring everything that we do is created with an eye towards a rewarding consumer experience. Digital is where we will engage, to go beyond campaigns to build sustainable relationships.

It is an in-house agency that combines extraordinary Pepsico marketers with external creative talent weve hired to create our a full service in-house team.

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So we we have a team of 20 people who sit a few miles from the main FL HQ . We have brand managers and brand directors leading planning and strategy,. We also have a top notch team of copy writers, production artists, art directions and a creative director. Whats key is that this is a rotational assignment for our marketers. We have top talent come do a rotation, and then go back in 18-24 months and democratize this learning in other parts of the org they go to.

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ProgrammaticMedia

D3 is Focused on Content Creation, Relationships & Conversion Digital Agency

CEM

E-Commerce

At D3, our short term objective is to drive business growth.

Our internal agency, which serves 9 brands, is focused on leveraging data to drive concepts, content creation and production.CEM, which stands for consumer engagement management, aka CRM, is really about leveraging our demand insights to personalize communications. Frito-Lay Snacks Perks is the first Frito-Lay Consumer facing brand that is licensed to speak to the entire Frito-Lay portfolio of brands and the goal is to raise consideration of the relevant subset of Frito-Lay Brands for consumers.Last year, we started our own in-house trading desk, which we run as a hybrid model with a few technology partners. Goal here is to drive efficiencies while building a data infrastructure. And finally, we are also focused on conversion, both building capabilities that drive impulse in the real world as well on conversion online.

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DataIt Starts With

As you have already heard yesterday and you will later today, Data and Insights is the foundational building block for our work.

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Search DataSocial DataLocation DataInterest DataPurchase DataConsumption Data

16 Layers of Data That Matter

We primarily leverage six categories of data. Search data to understand consumer need. Social data to understand consumer interactions & conversations Location data to understand shopping patterns. Interest data to guide content creation by cohort. Purchase data to help with targeting. And finally consumption data to understand if what we are doing is actually working and making a difference.

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Proprietary DEMAND Insights To Segment the Consumer Database

Classic Snacker 6% Value Seeker 7% Flavor Seeker 43% Natural / Organic 3% Premium Snacker 35% Portion Control 4% Hearty & Healthy 2%

All the data I mentioned is captured in a scalable consumer database we are building across PepsiCo. This database is a combination of first party, second party and third party data and is global.

At Frito-Lay, we compete beyond the chip aisle. We want to serve consumers with products that are relevent for every occasion. Demand insights essentially tells us that most snack choices made by consumers are determined by two things: where you are and who you are with. If you are at home for a superbowl party with friends, you are most likely to buy and serve Tostitos and dip, rather than cheetos. Snacks is also a repertoire category, consumers choose different snacks for different occasions. We have essentially segmented all the consumers in our database based on their snack purchases into one of 8 repertoires.

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Data Platform With Robust Consumer Profiles

Repertoire: Premium Snacker

Interests

PepsiCo Website EngagementMountaindew.com VisitorDo Us A Flavor SubmitterCheetos.com Visitor

Sports FanMusic InterestPurchase / RetailToys PurchasersDiaper PurchaserAmazon Shopper

Programmatic PartnersAn Integrated Marketing Technology Platform for Scale

With the database as our key foundational piece, we are building an integrated marketing technology platform to guide our content creation and distribution.

As consumers participate in various brand campaigns with Pepsi, Lays, Doritos and Cheetos, we are able to create holistic consumer profiles in our database. Applying PepsiCos insights framework is the key to making this actionable. We are then able to model our data to drive scale with our advertising partners.

Whether its our owned email programs, programmatic buying or even publisher direct, we apply the insights from our database to guide when and where the content is distributed. 16

800+ Pieces of Content

So, at this point, you may be wondering, this all sounds fantastic in theory, how is this actually working?

Well, weve had a fantastic Year 1. Its even more impressive considering the fact that I had no idea what I was doing as Ive never run an agency before. Talk more about meSo this success is despite me and a huge credit to our incredible team.

We created 800 pieces of content across the brands D3 supported, everything from banner ads to Facebook campaigns to augmented reality experiences. Lets look at a few of these17

Results

10% Sales Growth Since Campaign Launch

Highest ROI on FB

4X Increase in EngagementIn-house Media Desk 30% More Efficient

The Model is Paying Off

Higher Consumer EngagementReduced Time to MarketSignificant Production SavingsAccelerating Marketing Technologist Capabilities

the 70:20:10 approach.20

APPROACH

PROVENMETHODS

70% of our activity will run through tested methods that are clear on ROI (visuals include examples of past work)21

Stacys Pita Chips is one of the main brands we work on. 22

Integrating Data into the Creative Process is Key for Success

Social Data

Search/Content Data

The first thing we did once we took on the brand was to mine as much data as we could. We looked at social data for Stacys consumers, search data for what they were interested in buying23

APPROACH

VALIDATEDNEW

20% is innovation taken from a proven base (visuals include examples of past work)

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Personalized Communications Led to 5% Sales Lift

Flavor SeekerClassic Snackers

APPROACH

NEW

And our last 10% will be put behind new ideas. Some of our most successful campaigns have been driven by that final 10% - like Crash The Super Bowl (visuals include examples of past work)27

At their core, people who love Funyuns can be called Non-Conformists

ConversationsCohorts

Conversation about Funyuns was already happening. How do we add to the conversation rather than detract from it?29

400 Pieces of Content

36% Organic Engagement

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Feedback?

@ashwinnathan