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P&G teams to create private Net builder

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For 163 years, Procter & Gamble Co. has built a reputation not only as a brilliant marketer but also as a devout guardian of its know-how. Now, in a bold move, it plans to take what it’s learned and use it to not only help its own executives, but other companies’ as well.

P&G is teaming with software provider Worldwide Magnifi Inc. to introduce an as-yet-unnamed business to build private Internet networks. The networks will allow all involved in a product’s marketing to communicate online while viewing everything from documents to ads under development.

Bankrolls and brainpower

P&G is bankrolling the business, for now dubbed "Project EMM (Enterprise Marketing Management)," and contributing its marketing brainpower as well. Dollar amounts have not been disclosed. Worldwide Magnifi, which is being folded into Project EMM, is bringing its software expertise. The new company will target Fortune 2000 clients, essentially selling P&G’s marketing brainpower to its competitors.

The Internet network venture could give P&G’s competitors insight into its marketing inner sanctum, something that was debated before the company gave Project EMM the go-ahead. P&G’s marketing methodologies and best practices will be embedded into Project EMM’s templates. "They might be giving a competitive advantage away," said Sheryl Gatto, VP-interactive services at Nykamp Consulting Group. "It’s a very fine line that they’re going to have to walk, to protect the family jewels."

Dan Maurer, president-COO of Project EMM, shrugged off the idea that P&G is compromising itself. "It’s our people that have the insight," he said. "This is one tremendous accelerator. But it’s the people that will use it that will make the difference."

A boardroom priority

The deal reflects a priority among P&G’s top executives to somehow profit off the Internet—and fast. The company has fumbled about for a cohesive Web strategy since the mid-1990s, and Wall Street is growing impatient. It is under pressure to find new ways to make money other than selling consumer package goods such as detergent and dog food, preferably by harnessing technology. Project EMM is being counted on to do this.

Hunter Hastings, Project EMM’s CEO, reckons it will soon have at least 100 clients, which will be charged monthly fees tallying anywhere from $300,000 to more than $1 million annually. P&G, of course, has already signed on as a major client, as have Coca-Cola Co. and BBDO Worldwide.

While signing on big-spending clients is a priority, P&G insiders are keener on how Project EMM can help the maker of Pampers, Bounty and Mr. Clean recapture its reputation as the world’s top marketer. "They looked at it as a great way to reinvent its marketing," said Maurer, who formerly was general manager of I-Ventures, P&G’s Internet division. "This is a wonderful way for them to take a leadership role in marketing again."

P&G divisions have a history of competing against each other for brand bragging rights and marketing dollars. And while infighting has helped keep P&G hungry and energetic despite its size, it doesn’t lend itself to e-business, where teamwork is more important.

Indeed, cooperation, particularly among P&G marketers on global brands such as Tide and Vidal Sassoon, drove it to launch Project EMM. Using a private Internet network, for example, Vidal Sassoon sales managers in Beijing and London will be able to view, and comment on, new packaging for the shampoo at the same time as a brand account executive at the Cincinnati headquarters.

For a company such as P&G, which sells as much outside the U.S. as in it, such technology has staggering potential. What remains to be seen, however, is whether it will give up much of its hard-earned marketing capital along the way.

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