P&G/PARAMOUNT DEAL LIKELY TO BE MIMICKED

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Procter & Gamble Co. shuttered P&G Productions in 1991, bidding goodbye to Hollywood. Now it's back, on the arm of the Paramount Television Group, and other advertisers are scrambling for an escort to the party.

One possible partner is Television Production Partners-a consortium of companies including AT&T and Campbell Soup Co. TPP is now negotiating with Creative Artists Agency plus the telefilm divisions of Paramount and Columbia Tri-Star to create network programming for the 1995-96 season.

"I think what P&G just did is brilliant, and I'm envious," said Campbell Soup Co. VP-Global Advertising Gary Moss. "That's what we hope to bring to bear by funneling all our activities through the Campbell Media Alliance [a True North Communications unit] to explore alliances. My hope is TPP will soon be able to do something similar to the P&G/Paramount deal."

By pooling financial resources of advertisers, TPP mitigates the tremendous risks of programming development and the costs of entry.

According to executives close to the P&G/Paramount alliance, P&G will invest more than $120 million in the next three years to help fund new network series and first-run syndication programming, with P&G contributing half of the costs for network series pilots and becoming an equity partner in shows for first-run syndication.

That's a fraction of the $3 billion a year that P&G spends on advertising. But many advertisers don't have the volume and breadth of brands to do it alone.

Peggy Kelly, VP-advertising at Bristol-Myers Squibb Co., said: "I would hope other advertisers would seek to control their destiny a little more ... We are talking to a couple of people on the production company and studio side, and are close to a couple of things."

As P&G Chairman Ed Artzt indicated in his wake-up call at the 1994 annual meeting of the American Association of Advertising Agencies, such ventures may be warranted. It was after that speech that Jack Wishard, a Paramount consultant and former VP of P&G Productions, called Paramount Television Group Chairman Kerry McCluggage and said: "This is a gilt-edged, engraved invitation for us to make a major pitch."

Explained Bob Wehling, P&G senior VP-advertising, public affairs and market research: "Like we said last May, we need to reach broad audiences efficiently. It helps ensure we have strong programming from a terrific programming developer with our advertising attached to it throughout its life."

Mr. Wehling acknowledged the investment is a way to gain some clout over the cost of TV ad time, as P&G is said to have ultimately done when it partnered with Universal/MCA on "Northern Exposure." However, "It's misleading to say that's the driver," he said. "The driver is having a solid base of programming with commercials in it that can reach broad audiences ... The central point is that it's a global deal; programs that are hits have to find their way into international markets."

If a program scores, the profits could be used to defray media costs, but "on the other hand, P&G could use the profits to further invest in both programming and new media," Mr. Wehling said.

Though the deal has called into some question the role of agencies in this new world, D'Arcy Masius Benton & Bowles' TeleVest unit assisted P&G in its negotiations with Paramount and will manage the venture on a day-to-day basis, agency executives said.

Some execs weren't upbeat. J. Walter Thompson Co. Chairman-CEO Burt Manning, who last week named William Eccleshare to the new post of worldwide director of strategic planning, said Mr. Eccleshare "will look into this. The new trend leaves [agencies] with the creation of messages that go into [media] vehicles ... I don't know if that will suffice in the future."

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