P&G Challenges Its Media Agencies in China to Offer New Ideas

As Marketers Cope With New TV Rules, Incumbents Starcom and MediaCom See Chance to Grow -- Or Lose -- Business

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Procter & Gamble has issued briefs to its media agencies in China, requesting that they present ideas beyond their existing scope of work, Ad Age has learned.

"We are not launching a media review in China," a P&G spokeswoman said. "We're continually talking to our partners about opportunities for efficiencies across the business."

According to a number of industry executives, the process places an emphasis on the consumer-packaged goods giant's $500 million TV account in mainland China, which resides with Publicis Groupe 's Starcom. The other half of its China media business is handled by WPP Group's MediaCom, the non-TV agency of record.

It's understood that only those two media agencies are involved and that either agency's portion of the business could be affected. Both firms referred calls to the client.

TV takes the biggest share of most major advertisers' ad budgets, and P&G is the largest advertiser, spending more than $1 billion a year in China, according to the Ad Age DataCenter.

In January, the Chinese government plunged the TV market into chaos with rules designed to crack down on "overly entertaining" shows and end commercial breaks during the most popular dramas. As a result, China's already-rampant media inflation has intensified, supply has contracted and marketers have been scrambling to revise their media plans and TV budgets to account for the restrictions.

In P&G's last media review in 2009, MediaCom won non-TV media business previously handled by Starcom. At the time, P&G said in a statement: "In China, as elsewhere in the world, P&G highly values its working relationship with Starcom. The assignment changes represent only the non-TV scheduling and negotiations responsibility by Starcom for P&G in China. Starcom still has a substantial business relationship with P&G in China, including the majority of its communications-planning assignments."

Last year, MediaCom won the P&G planning business in Japan and assignments in a number of Southeast Asia markets.

The company recently announced that it would continue to hire in high-growth areas such as China, despite plans to cut $1 billion in total marketing spend and 5,700 nonmanufacturing jobs over the next five years.

Contributing: Jack Neff

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