D'Arcy fallout: P&G centers $3.8 billion at Publicis and Grey Global

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Publicis Groupe and its Publicis Worldwide network were the big winners in one of the largest creative shakeups in history as Procter & Gamble Co. streamlined its $3.8 billion business with two holding companies, Publicis and Grey Global Group.

In one stroke, P&G reassigned more than $500 million of its $1.7 billion U.S. business and another $200 million to $300 million in overseas accounts.

The shift followed the closure of D'Arcy Masius Benton & Bowles by new owner Publicis. "The closing of D'Arcy afforded us a great opportunity to look at all of our agency assignments," said Lynne Boles, P&G manager-global advertising development, who worked closely with Global Marketing Officer Jim Stengel over the past two months to make the changes. "It wasn't our choice, but it did allow us to say what's the best way to realign our brands."

In the reshuffling, longtime P&G shop Arnold McGrath was shut out. While the agency's account loss amounted to less than 5% of P&G billings, it was a big blow to the Havas shop. The consumer-product giant was among Arnold McGrath's largest accounts in New York, and U.S. measured media spending on its P&G brands was $81.2 million last year, according to Taylor Nelson Sofres' CMR. Arnold McGrath Chairman Pat McGrath, who had strong, decades-old ties to P&G, is expected to retire by the end of this year.

Publicis Worldwide picked up the biggest piece of Arnold McGrath's business-Bounty paper towels-a $1 billion global brand sold in the U.S., Canada, Germany and England. Saatchi & Saatchi Chairman-CEO and P&G alum Kevin Roberts takes on the added role of coordinating all P&G business within Publicis.

Grey was also a net gainer, picking up Torengos snacks from D'Arcy and the global Zest and European Ace detergent accounts from Arnold McGrath, but giving up Camay in Latin America to Publicis' Leo Burnett Co.

Executives familiar with the situation said Publicis Groupe Chairman-CEO Maurice Levy had pushed to move as much of D'Arcy's business as possible to Publicis Worldwide. He succeeded in getting two big chunks of the client's business-most of P&G's drug business in addition to the entire tissue-towel account. Other key parts of the business went elsewhere, including three of five high-profile billion-dollar brands involved in the shakeup. Always went to Burnett, consolidating the feminine-care business, and Crest and Folgers to Saatchi, which now handles global oral care and beverages.

A P&G executive said Publicis Worldwide was the default destination for D'Arcy people and accounts, though many business-unit managers shifted work elsewhere along category lines. Health-care managers split oral care from most of the drug business, the executive said, because the accounts lacked real synergies and D'Arcy had at times spread staff too thin among them. "The business units made the decisions because they're the ones affected," Ms. Boles said.

Publicis' Kaplan Thaler Group, which officially joined P&G's roster only nine months ago via Clairol Herbal Essences, was the surprise winner of the Swiffer and Dawn accounts in the U.S.

contributing: lisa sanders

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