In two unrelated moves-one voluntary and one not-WRG's media department last week lost responsibility for nearly $100 million in broadcast billings.
Advertising Age has learned that Procter & Gamble Co. pulled its $50 million network news buying assignment from WRG, New York, and consolidated it with nearly $600 million in network buying assignments already at D'Arcy Masius Benton & Bowles' TeleVest unit.
Separately, WRG announced it's scrapping the agency's spot buying group and unbundling nearly $50 million in spot broadcast buying assignments into a new joint venture with independent media company KSL Media.
WRG executives also said they may spin off the agency's network TV department.
The news shift, effective at yearend, includes morning and early-evening news programs, and leaves WRG with P&G's network sports and national cable buying, worth about $77 million. The switch follows a P&G study of its media operations (AA, Feb. 28).
The move is the most recent in a series of setbacks suffered by WRG, including the defections of business from Midas International Corp., Continental Airlines, Mobil Chemical Co.'s Hefty trash bags and Miles Inc.'s Alka-Seltzer. Last week, Reckitt & Colman also moved its $7 million Airwick account to TBWA, which already handles Woolite and other Reckitt brands.
WRG's 1993 billings fell 4% to $882.6 million, after declining 0.5% in 1992, and the agency lost 118 employees. Also last week, WRG completed a reorganization of the agency along category lines.
The new spot buying unit, called Media+More, will be jointly managed, but KSL will handle all buying.
WRG executives claim the venture will provide better spot buying services for clients by tapping into KSL's staff of 120 people in six offices nationwide.
"They [KSL] give us buying clout we don't have now," WRG President David Sklaver said.
However, some observers see the venture as a move to reduce the overhead of WRG's media department, which has been losing spot buying assignments.
WRG Exec VP-Corporate Media Director Mark Buttitta and KSL VP-Marketing James Dragoumis will oversee the unit, but it's unclear how many of the WRG's 12 spot buying staffers will be incorporated into the unit.
"They are looking to improve their economies of business by letting people go and letting research services go," said Kal Liebowitz, president of KSL. "Where they let 12 people go, they now gain six regional offices and 120 people" through KSL.
Under the arrangement, KSL will handle all spot buying for WRG's Hertz Corp., Chase Manhattan Bank, Liberty Mutual Insurance Co. and ITT Sheraton Corp. accounts at no cost to WRG.
All compensation on those spot buying assignments will go to KSL, which derives its revenues from a spread between what it charges advertisers and what it pays stations.
That practice, while common among some independents, is frowned upon by most full-service agencies out of concern that advertisers may not be getting the best rates possible, or the best spots.
Mr. Liebowitz said WRG will split the revenues with KSL on any new media accounts that Media+More wins. With WRG's spot billings, he said KSL now bills about $300 million, 75% of which is in spot broadcasting.
But the new venture begs another question, which is why WRG didn't partner with Advanswers, St. Louis, an independent media company that's a wholly owned subsidiary of its parent company.
In fact, WRG tested the concept with Advanswers last year but concluded it wasn't in the best interest of both units, because it might lead to potential client conflicts. WRG and Advanswers, which bills about $500 million, often handle competing accounts, and neither wants to be precluded from pitching competing business in the future.
WRG Chairman Kenneth Olshan indicated that WRG's network buying operation may also be spun off into a separate unit to seek outside business. That strategy appears to be working for D'Arcy's TeleVest, which also retained the $160 million Burger King Corp. media account last week.
As part of the WRG reorganization, the package-goods group will be run by Paula Forman and a creative partner to be named. Ms. Forman recently joined WRG from Saatchi & Saatchi Advertising.
The services group will be run by Mark Abrams with Frank Sampogna on the account side and Joyce King-Thomas and Warren Lieberman on the creative side. Account execs Jed Bernstein and Joe Schulte will head the corporate group, with creatives Michael Mark and Patrick Flaherty. All have been named exec VP-managing partners.
Pat Sloan and Joe Mandese contributed this story.