Consumer dictates P&G's new planning

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Procter & Gamble made a surprisingly radical shift with its North American communication planning assignments last week, leaving even executives at the world's biggest advertiser uncertain as to exactly how the move will change the way it markets.

P&G reorganized planning assignments along category rather than brand lines and made the biggest single shift of work to a nonincumbent agency holding company-Aegis Group's Carat-in its history. Only last year, most P&G media planning was done within creative agencies.

"That was the old media planning model," said Cindy Tripp, the company's associate director of North American media and marketing. She led the process at P&G. "I don't think it's fair to assume anymore in the world of media fragmentation and consumer fragmentation, that because you're best in class in creative that you're necessarily best in class in holistic communications planning."

The assignment combines media planning formerly handled by Grey Global Group's MediaCom, Publicis Groupe's Starcom MediaVest Group and Havas' Media Planning Group with broader responsibilities that cover all points of consumer contact, including consumer and trade promotion.

In all, Carat and the winning incumbent, Starcom MediaVest, will influence more than $4 billion in North American marketing spending, including areas of consumer and trade promotion that have never before been handled by P&G's agency planners. They will start work Oct. 1, as P&G starts budgeting for the fiscal year that will begin in July 2005.

Ms. Tripp said she cannot predict how the communications planners will change P&G's marketing mix. "I don't know what the future holds because we haven't done the consumer work yet that we're asking these [agencies] to do," she said.

"It's not about media. It's about the consumer. When you put the consumer at the center, you're going to get a very different communications plan than if you're talking about zero-basing media. It will have an impact, but it's not going to take TV away," Ms. Tripp said.

no bludgeoning

Communication planning isn't just about econometric modeling and spreadsheets, said David Verklin, CEO of Carat, who led the agency's pitch. "It is about saying you need to engage the consumer in some way vs. the old-time philosophy of bludgeoning the American consumer to death."

P&G resists painting the new planning agencies as leaders of the marketing process. "The leader of the marketing process is the P&G brand manager," Ms. Tripp said. "That's not changing."

But the new assignments clearly will change the process, she said, bringing more collaboration among all marketing services shops and "having communication planning earlier in conversations, when dramatic differences and impacts can be considered."

Grey's MediaCom and Omnicom Group's direct shop Targetbase, Irving, Tex., also participated. Ms. Tripp said that Carat and SMG were chosen because they delivered the best on P&G's vision of communication planning.

three-point pitch

Compensation for the new assignment is still under discussion with the individual agencies, Ms. Tripp said. An executive familiar with the discussions expects compensation to be primarily fee-based.

Carat's winning pitch consisted of three case studies of the agency's planning work, including:

--A viral campaign for the launch of Diageo's Smirnoff Ice in the U.K. that included point-of-sale materials stuck in such unlikely places as pockets of clothes in hip boutiques.

--A 13-episode home-redecoration TV series created for Canadian home-improvement retailer Rona.

--A live video billboard in Times Square that displayed a real-time Web conference that featured then Placeware-CEO George Garrick. Placeware, now owned by Microsoft, is part of Microsoft Office.

SMG had formed a separate P&G media-planning unit last year, giving it an edge in the contest. "It is a big win for us, and the team has done a fantastic job," said Publicis Chairman-CEO Maurice Levy, who led the SMG pitch.

SMG will handle P&G's most glamorous and high-focus businesses in beauty care and its most profitable business in fabric care. But although the company picked up three of P&G's billion-dollar global brands, it lost four (see chart).

Carat picked up planning responsibility for six of P&G's 16 billion-dollar brands.

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