For P&G, changing incentives for agencies is part of the solution. Though most marketers started moving away from media commissions for their agencies years before, P&G's move was perhaps the most radical to date: Switching agency compensation to a straight percentage of sales. Unlike other performance-based compensation plans, P&G's contained no fees, no vestiges of media commissions and no complicated formulas.
Focusing clearly and simply on what's really important for brand managers and agencies was the idea, says Robert L. Wehling, P&G global marketing officer, who's both a 40-year veteran of P&G's traditional marketing operation and an architect of the new system.
"Our brands and agencies are now compensated and rewarded on the same basic objectives," he says. "They have more incentive than ever before to look broadly at all communications devices."
Before, annual planning centered around TV, with any budgetary leftovers devoted to other media. Now, annual planning meetings are more likely to start with consideration of a full range of media and communication approaches, from direct mail and event sponsorship to conventional TV advertising.
It's a path that's taking P&G places it's never been before, including shopping mall kiosks, home shopping network QVC and integrated TV-print-Internet campaigns for such brands as Bounty paper towels, Pampers diapers and Pur water filtration systems.
At Unilever, Brad Simmons, VP-media services for the U.S. and Canada, is overseeing an $800 million TV buying and planning review due to conclude in November, which is also aimed at supporting Unilever's own new era of broad-based "communication channel planning." He also oversaw consolidation of Unilever's interactive media buying in September with OgilvyOne and digital@jwt.
MEDIA BUYING BATTLE
Unilever and the contestants in its media buying and planning agency review (r)MDNM¯agreed that a consolidated approach would likely work best, Mr. Simmons says.
The review, which includes Western Initiative Media Worldwide, West Hollywood, Calif., WPP Group's Mindshare, New York, and Omnicom Group's Optimum Media Direction, New York, will also include research support for communication channel planning. That includes allocation of resources to such media as online and print, plus a broad range of other channels such as events and publicity.
Communication channel planning has "helped the brands look at the entire media marketing investment earlier in the process before we just run out and start doing media planning based on 30-second units, " Mr. Simmons says.
Unilever's new focus on media comes as Mr. Simmons, too, has honed his focus there. After holding media posts at Minneapolis-based Campbell Mithun, Miller Brewing and Pillsbury, Mr. Simmons later managed a full range of marketing services at Helene Curtis. But after Helene Curtis was acquired by Unilever in 1996, he was offered the chance to head all of Unilever's U.S. media operations in 1998.
"I had successfully broadened my career," Mr. Simmons says. "And I had to make what was frankly a difficult decision with pros and cons because I refocused on media again. Part of what made this attractive was what we're doing with communication channel planning."
Indeed, media's star has risen lately not just within Unilever, but in marketing generally, as such mammoth marketers as General Motors Corp. and Kraft Foods also mull consolidating media buying and planning.
"The size of the investment is so great and the fractionalization of media and the consumer communication world is changing so drastically I think [media executives are] relied on more than ever before to bring perspective and wring out as much productivity as possible for those dollars," Mr. Simmons says. "Our value to the company is better recognized."