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Pepsi and Beyoncé: The New Sponsorship Model?

Beyoncé and PepsiPepsiCo recently signed a sponsorship deal with Beyoncé worth a reported $50 million—but we’re not terribly concerned with news about a pop singer promoting a soda company.

We’re more interested in the nature of the relationship between the two parties, which seems to have broken new ground when it comes to sponsorships and invites the question: Who is promoting whom?

Pepsi calls the contract a “brand ambassador” deal, and the accompanying New York Times headline mentions Pepsi’s focus on “collaboration”. What do these terms mean, exactly? Well, Beyoncé won’t just appear on Pepsi products, star in commercials, and perform in next year’s Pepsi-sponsored Super Bowl: Her contract also includes “a multimillion-dollar fund to support the singer’s chosen creative projects.”

Correct us if we’re wrong, but this move is unprecedented—or at the very least extremely rare.

For spending a good deal of time promoting Pepsi, Beyoncé will receive a significant amount of both time and publicity to dedicate as she sees fit to projects completely unrelated to the Pepsi brand. We usually scoff when an artist releases a statement about sponsoring a big corporation “without sacrificing my creativity”, but we give some credence to Pepsi’s desire to play the role of “artistic patron” rather than simply paying for Beyoncé ’s time—the key word is “authenticity” , and we feel like they’re onto something here. Company spokespeople call it “a creative content development fund.”

Beyoncé ’s manager says that these collaborative projects could include “live events, videos, ‘a cool photo shoot’ or almost anything else” including humanitarian efforts. We have a feeling the star will take this opportunity to direct more of the public’s attention to certain charities, social causes, unsigned artists…the list is essentially endless, and Pepsi doesn’t mind because, as a top marketing exec puts it, “all that transfers into brand equity for Pepsi, and, ultimately, sales.”

At this moment in time, big brands like Pepsi have a lot more money than record companies to support a music industry that’s still hemorrhaging revenue. Pepsi clearly wants to beat Coca-Cola at the music sponsorship game, so we say it’s your move, Coke—now hire Justin Timberlake and convince him to come back to music…

What do we think Beyoncé will do with her big soda money fund?

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