AVON NO LONGER CALLING ON D'ARCY FOR CREATIVE WORK: COSMETICS COMPANY MOVES AD ACCOUNT IN-HOUSE, TRIMS SPENDING

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Avon Products has pulled its creative account in-house and trimmed ad spending as it seeks to impress Wall Street.

The business was consolidated just two months ago at D'Arcy Masius Benton & Bowles, New York. Before that, it had been split between D'Arcy and its MacManus Group sibling, N.W. Ayer & Partners.

MacManus' MediaVest is expected to retain media responsibilities.

VISIONS OF $100 MIL IN ADS

Earlier this year, Avon said it would spend $100 million on global advertising this year. But the cosmetics company spent just $5.3 million in the U.S. through May, according to Competitive Media Reporting. It spent $22 million on U.S. advertising for all of 1998.

D'Arcy and Ayer are said to have created a global brand positioning for Avon, but it's not clear whether the marketer will create a campaign based on that approach.

Executives at Avon and MacManus were not available for comment.

Avon has promised financial analysts for more than a year it will polish its image and boost sales in the U.S. as part of a company overhaul. Those plans included a launch of the global branding campaign by yearend.

But Avon has canceled some of its network TV upfront buys, according to media executives. Magazine executives said the company has pared the list of titles it will use, but is still planning to launch advertising in November issues.

4TH-QUARTER PLANS UNCERTAIN

One publisher said Avon is still discussing plans for the fourth quarter. The company put its print ads on hold earlier this year and asked publishers for value-added proposals (AA, April 19).

Publishers have not seen the fourth-quarter creative, so it's not clear if the ads are part of the global campaign or support Perceive, a new scent due out for the holidays.

The decision to move the account in-house emulates the setup of fashion and beauty marketers, most of which create their own ads, said executives close to the situation. Revlon, for example, operates an in-house agency called Tarlow Advertising, while Calvin Klein relies on its CRK Advertising unit.

Avon already has a significant in-house marketing arm that creates brochures and fragrance advertising.

WALL STREET LIKES STREAMLINING

After languishing in the 1980s, Avon looks good to Wall Street lately, thanks to a streamlining effort under Chairman Charles Perrin. The company has sold businesses that didn't fit with its core beauty focus, and developed new ways to drive sales through the Internet and telephone ordering.

In July, Avon reported earnings that met analysts' expectations, but several were concerned about a slowdown in U.S. sales growth.

"We are hopeful that increased advertising, new product launches (including the fragrance Perceive) and strengthened incentives for the representatives should help Avon meet its top line objectives

. . . This represents Avon's biggest near-term challenge," Salomon Smith Barney analyst Wendy Nicholson wrote at the time.

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