P&G OPENS REVIEW FOR PROMOTION SHOP

Broad Marketing Assignment to Cover Health, Beauty Brands

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CINCINNATI (AdAge.com) -- Procter & Gamble Co. has launched a review to choose a promotion shop or shops to serve as a single point of contact for health and beauty brands on a wide variety of services, including event, in-store marketing, direct mail, print promotion, graphic and display design.

A P&G spokeswoman said the assignment

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includes "shopper marketing" but is not limited to that, and encompasses "both creative and executional work to provide a single point of contact for the brand," she said.

From 20 to 'four or five'
P&G already has winnowed a list that originally included 20 promotion shops down to "four or five" the spokeswoman said, though she declined to identify the finalists.

According to executives familiar with the review, P&G roster holding companies Publicis Group and Grey Global Group each have a consolidated entry. Publicis' is made up of promo shop Frankel, Chicago, and Saatchi X, the newly minted global shopper marketing agency formed by the acquisition and merger last month of Thompson Murray, Fayetteville, Ark., with Saatchi & Saatchi Collaborative Marketing, New York. Grey's team includes New York-based entertainment marketing shop Alliance and design shop G2 as well as retail marketing firm J. Brown Agency, Stamford, Conn. Other shops involved, according to the executives, are Interpublic Group of Cos.' Draft, Chicago, and Omnicom Group's Integer Group, Denver. All currently handle some promotion duties for P&G.

Executives of the agencies could not immediately be reached for comment, declined to comment or referred calls to P&G for comment.

Pilot program
P&G will decide some time in the next two to three months which agency or agencies and which two or three health and beauty brands will be involved in the pilot project. The test may ultimately produce a model that is applied to other P&G brands and businesses, but the spokeswoman said: "It isn't going to be a good fit for all of our brands."

The assignment is expected to begin in early 2005 and be evaluated for possible broader application during P&G's fiscal 2006, which begins in July 2005. It's an outgrowth of an effort P&G began last year to streamline its roster of 200 shops that handle marketing services, otherwise known as "below the line."

$4 billion planning review
The review is running simultaneously with, but is not directly connected to, P&G's $4 billion communications planning review, whose winner or winners could play a role in steering the work of the new one-stop promotion shops in years ahead. A decision on the planning assignment is expected by July.

P&G hasn't yet discussed compensation for the new single-point promotion assignment, said executives familiar with the review. But the agency (or agencies) could also become a test subject for P&G's plans to use incentive-based compensation, such as the sales-based system now used for ad agencies, to below-the-line shops.

The new promotion assignment does not include advertising agency, interactive marketing or public relations duties, which will continue to be handled separately. Nor does it include retail marketing now handled by agencies for teams that serve Wal-Mart Stores, Target or other retailers.

The promotion assignment also includes some administrative and project management work now handled internally by P&G's marketing operations unit, which world free the marketing operations staff for other more strategic and creative duties, the spokeswoman said.

Outside services
The promo agencies wouldn't have to bring all services in-house, but would need to contract for and administer services they don't provide themselves. Some vendors, such as sweepstakes fulfillment houses and print production shops, might continue in their same roles but report to the agency rather than directly to P&G.

Some executives close to P&G believe the company may launch yet another review aimed at consolidating agencies that handle in-store marketing with retailer teams. But Quaisar Shareef, director for global shopper marketing for P&G, said in an interview earlier this year that retailer concerns about conflicts would make broad consolidation difficult.