UNILEVER PANEL TO PROPOSE HIKE IN FEES FOR AGENCIES: CORE SHOPS WERE ANGERED BY RECENT JAB

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A Unilever committee reviewing agency compensation is expected to make a recommendation next month to boost fees for core shops early next year.

The committee-code-named Project Dickens, a pointed reference to the Charles Dickens character Oliver Twist, who as he begged for a larger portion of gruel pleaded, "Please sir, I want some more"-is acting in response to complaints from shops that Unilever is increasingly asking them to perform more services without offering commensurate remuneration.

Unilever's core agencies include McCann-Erickson Worldwide, J. Walter Thompson Co., Ogilvy & Mather Worldwide and Ammirati Puris Lintas.

THERMASILK TO JWT

Separately, Unilever's Helene Curtis unit gave the $82 million launch in January of its ThermaSilk haircare line to JWT's New York office, instead of Curtis agency DDB Needham Worldwide, Chicago.

According to insiders, JWT got the nod because sister division Chesebrough-Pond's actually developed ThermaSilk; JWT is both a Chesebrough shop and a long-time Unilever core agency.

JWT is a Clairol agency, and there are indications JWT parent WPP Group will set up a new shop to handle JWT's Clairol business to avoid any potential conflicts. The conflict would be exacerbated by JWT's expected win of the Natural Instincts haircolor business now at Wells BDDP, New York. Agency executives could not be reached for comment.

Core Unilever agencies were angered recently when Unilever Chairman Niall FitzGerald delivered a speech to the European Association of Advertising Agencies complaining that while Unilever spends $6.5 billion a year on marketing, agencies fail to look beyond traditional advertising to build brands. Specifically, he criticized agencies for relying too heavily on network TV and not investing in other marketing forms.

One executive close to Unilever said the problem is that the company does not compensate its agencies for "doing things outside advertising. That is what has to be addressed," he said.

Another executive close to the Anglo-Dutch consumer products conglomerate noted that profitability on Unilever assignments has been a problem, particularly for shops that have to invest heavily in developing markets or have too much of their revenue base tied to Unilever.

Unilever executives could not be reached for comment and a spokesman declined comment until they could be contacted.

The committee, formed last year and composed of Unilever ad executives, is trying to move Unilever further beyond commissions to a fee structure for services so agencies are given incentives to work outside of traditional media.

MORE FOR NEW-PRODUCT WORK

Another agency executive familiar with the committee's work suggested the most significant change coming is that Unilever agencies probably will be paid more for new-product development work. But he indicated there will be no change in commission structure for emerging markets.

The last time Unilever made significant changes in compensation was in 1992, when it began an overhaul of its commission system at Chesebrough-Pond's, raising the base commission rate to 13.25% from 10.75% and awarding incentive bonuses to boost remuneration as high as 16.5%.

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