P&G to Review Massive Media Planning and Buying Business Across North America

In 2014, P&G Spent $2.7 Billion on U.S. Measured Media

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Procter & Gamble will announce as early as next week a buying and planning review across the U.S., Canada and Puerto Rico, according to people familiar with the matter. The company had been rumored to join major marketers including Coca-Cola, Unilever and L'Oreal that are already rethinking how and where to spend media dollars. It will be the first time the packaged-goods giant has reviewed its U.S. buying account in nearly two decades.

P&G declined to comment.

In 2014, P&G spent $2.66 billion on U.S. measured media, which is a decrease from the $3.47 billion it spent in 2013, according to Kantar Media. In 2013, the packaged-goods giant spent $4.99 billion on total advertising in the U.S. and topped Ad Age DataCenter's list of top spenders in the region.

Publicis Groupe's Starcom Mediavest Group is the longtime incumbent on the U.S business. Carat supports buying in Canada, as well as global planning. And Mediacom supports buying in various international regions. SMG and Carat share duties on North American communications planning, which was last reviewed in 2004. It last reviewed U.S. media buying in 1997 and Canadian media buying last year, when Carat won.

Agencies either declined to comment or could not be reached.

The move to review comes as the packaged-goods giant aims to cut $500 million in agency fees and reduce the number of agencies it works with, according to comments from P&G Chief Financial Officer Jon Moeller on the company's recent earnings call. Though P&G doesn't disclose its total spending on agency fees, executives close to the company have estimated them at around $1 billion.

There has also been change on the leadership front. North America Media Director Kristine Decker joined the company and assumed the lead media role, serving as brand director North America Brand Operations. Ms. Decker had previously been brand birector-North America Pet Care, but P&G divested that business to Mars in August. She had been transitioning into the media role under Jodi Allen, former VP-North America Brand Operations. Ms. Allen has been overseeing North American media since the departure of P&G's former top media executive Julie Eddleman to Google last year.

While it's held onto its agency relationship for U.S. buying, the company also has made drastic changes to its digital media buying processes over the past couple of years. A few months ago, it brought programmatic buying functions in-house under a new internal operation called Hawkeye.

P&G CEO A.G. Lafley in August 2014 announced plans to streamline operations by divesting, discontinuing or merging more than half of its brands globally. The move would leave P&G with 70 to 80 core brands. Currently, the company's products are divided into four categories, including Global Baby, Feminine and Family Care; Global Beauty; Global Health and Grooming; and Global Fabric and Home Care.

For incumbent Starcom MediaVest Group, defending those P&G brands will likely be a top priority. But the massive review couldn't come at a worse time. The incumbent is also defending its Coca-Cola account. Mondelez, another large client, is rumored to be preparing a review. And late last year, the media agency network lost its AB-Inbev business to WPP rival Mediacom.

Contributing: Jack Neff

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