Mars looks to China for U.S. sweet spot

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Where do you get a big brand idea? Mars is the latest marketer to conclude that the answer lies beyond its major U.S. agencies.

Over the last few years, Mars has been looking to shake things up, both in terms of its marketing and new-product development. Now, in a blow to Grey Worldwide, Masterfoods USA has decided that the new campaign for Twix in the U.S. will be handled by independent Asian roster shop Nitro, rather than on-the-block Grey, the Twix brand's agency of record.

McDonald's Corp. and Coca-Cola Co., among other companies in search of breakthrough creative, have made a point of looking outside the boundaries of their U.S. agency offices in recent years, finding that great ideas can often trans-cend geographic borders. Mars now joins them.

The "test" of new creative for Twix in the U.S., a four-commercial TV campaign that breaks Sept. 6, is clearly not a vote of confidence in Grey, all the more anxious to hold on to the business now that it's up for sale.

Although a spokesman for the Mars' U.S. division said that Grey continues to handle Twix globally along with Starburst, Cookies &, Dove and Milky Way brands, he said Masterfoods chose to "pursue a creative approach for Twix outside of the current relationship." The move lends fuel to rumors that Grey's relationship with Mars is tenuous at best. A Grey spokeswoman referred calls to Mars.

Executives close to the situation note that Mars is "very frustrated" with Grey and express doubt that the agency can retain its status as one of the marketer's three global agencies for long. Mars also uses Omnicom Group's BBDO Worldwide, New York and TBWA/Chiat/Day, Playa del Rey, Calif., for its global brand assignments. Mars spent $415 million in measured media in the U.S. in 2003, according to TNS Media Intelligence/CMR. The five brands that Grey handles got $51 million, $18 million of that spent on Twix.

shake it up

Mars has had a 12-year relationship with Shanghai-based Nitro founder Chris Clarke (see sidebar below), who is said to be setting up a New York office presumably to handle Mars business. Nitro currently handles the bulk of Mars' business in Asia.

Mars has been shaking things up in other ways too. In 2001, Masterfoods struck a deal with Omnicom Group's Arnell Group, dubbing the agency its principal "marketing-development" agency to help coordinate upfront creative strategies for new products and enlisted Arnell to work with its roster shops, then BBDO, D'Arcy Masius Benton & Bowles and Grey.

Since then, Masterfoods has entered into a variety of new segments including energy bars with Snickers Marathon, mints with Aquadrops and gum with Skittles Bubble Gum, extended its top brands into cookies with Cookies & and put M&M's into a chocolate-bar form with the launch this month of M-Azing.

large-scale efforts

To get more attention for its brands, Masterfoods earlier this year consolidated media with Publicis Groupe's Starcom MediaVest Group, which it enlisted to help forge integrated-marketing partnerships, and has bowed a number of large-scale efforts to stir up long-used strategies.

Late last year, Masterfoods "relaunched" M&M's with a Great Color Quest promotion that involved turning the product black-and-white for a time before being brought back brighter and bolder than ever. Earlier this month, Masterfoods launched a quirky Snickers campaign dubbed "Make it happen with Snickers" that diverges from the "Hungry, why wait?" effort BBDO developed in 1996.

Grey Global Group, parent of Grey Worldwide, in late June said it had hired investment bankers to look for suitors. Interested parties include WPP Group, parent of agency networks Ogilvy Worldwide and Young & Rubicam, as well as private-equity firms, including Hellman & Friedman, San Francisco; Kohlberg Kravis Roberts & Co., New York; and Providence Equity Partners, Providence, R.I., which holds stakes in various media companies. Agency holding company Havas, the Paris-based parent of network Euro RSCG Worldwide, has said it is considering making a bid. Grey's bankers hope to wrap a deal by shortly after Labor Day.

contributing: normandy madden and lisa sanders

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