The desire by large multinational marketers to unify their worldwide marketing efforts is highlighted by two major ad account consolidations within the last two weeks: Colgate-Palmolive Co.'s shift to Young & Rubicam and Bayer's consolidation at BBDO Worldwide. We're talking big money (three-quarters of a billion) and big agencies losing out (Foote, Cone & Belding and Lintas).
And last year IBM replaced some 80 agencies worldwide to award Ogilvy & Mather its $500 million account. Procter & Gamble Co. and Kraft Foods are other giants paring back to fewer mainline agencies.
What's the reason? "To continue our market-share growth, we must execute our best advertising strategies and ideas simultaneously around the world," explained Colgate Chairman-CEO Reuben Mark.
Does this signal trouble for all but a handful of mega-agencies? No, the agency rosters of the top 100 advertisers have actually increased in recent years. But the newcomers are specialists. While one general agency may now handle the bulk of a large company's media advertising, the company will have an additional agency for interactive, or sales promotion, or direct marketing, or Hispanic or black advertising, or media buying-or all of the above.
In this era of agency consolidation, large agencies with a wide range of specialized divisions may find these units their salvation.