P&G Pulls Large Chunk of Media Business From Starcom

Pitch for Non-TV Planning and Buying Business Expected Soon

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GUANGZHOU (AdAgeChina.com) -- Procter & Gamble Co. has pulled its non-TV tactical planning and buying business in China from its media agency of record there, Publicis Groupe's Starcom MediaVest Group. The non-TV business, worth several million dollars in fees, accounted for about one-third of the fees P&G pays Starcom in China. P&G is the biggest advertiser in China, spending more than $1 billion a year, and is also Starcom's biggest client in mainland China.

P&G periodically "reevaluates our agency lineups on ground of business needs as part of our effort in striving for the most effective product communications with consumers. The assignment changes with Starcom in China are made in line with such needs," said a statement provided by Charles Zhang, P&G's senior manager, external relations for Greater China in Guangzhou.
The success of brands like Olay has turned P&G into China's largest advertiser
The success of brands like Olay has turned P&G into China's largest advertiser
No other reason was given for the decision, but rumors have swirled around the industry for the past few weeks.

Mainland China's media market remains frustratingly opaque for multinational companies operating there.

P&G is expected to hold a pitch for the non-TV business that could include other agencies that work with P&G globally. One of them, WPP Group's Mediacom, already handles planning for some P&G business in China and is considered the front-runner.

The pitch will be handled by P&G China executives including Laura Xiong, P&G's general manager, Greater China and Sameer Singh, who arrives in Guangzhou, P&G's headquarters for Greater China, later this summer as associate director of media for the region.

Starcom, a P&G agency in China since 2000, will continue to handle TV tactical planning and buying for P&G, China's largest advertiser, although there is speculation that the TV business will be put up for review, too, within a year. P&G officially denied that, however.

"In China, as elsewhere in the world, P&G highly values its working relationship with Starcom. The assignment changes represent only the non-TV scheduling and negotiations responsibility by Starcom for P&G in China. Starcom still has a substantial business relationship with P&G in China, including the majority of its communications planning assignments," said P&G in the same statement.

Losing all of P&G's business would be a major blow to Starcom in China, Starcom's second biggest market after the U.S.


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