P&G North America Media Review to Pare Roster to One
Procter & Gamble Co. will seek to consolidate all of its giant North American paid media buying and planning account -- now handled by at least four incumbents -- with a single shop and expects to have a decision by fall. News of the review was reported on Friday.
Incumbents on buying include Publicis Groupe's Starcom Mediavest Group, Dentsu's Carat and WPP's Mediacom for the U.S., Canada and Puerto Rico respectively. In addition, WPP's Catalyst handles search buying, which is also included. SMG and Carat split North American media planning duties as they have since that assignment first came in 2004. P&G hasn't reviewed U.S. media buying since 1997, though it last reviewed Canadian media buying last year.
P&G spokeswoman Tressie Rose said the incumbents will all be asked to participate, with other non-roster agencies also to be invited by a soon-to-be-issued request for proposal. After the fall decision and a transition period, the new assignment is expected to begin with P&G's fiscal year beginning in July 2016.
"We expect that we will get to one lead agency as we go through this process," she said. "But it might not be just one agency. For example, we might keep some of the specialization as we go through this process."
P&G historically had a larger lead agency and smaller "challenger" option in some areas, such as communications planning. But now "it makes sense for us to have a much simpler and streamlined organization," Ms. Rose said. "As businesses grow and get more complex, we added agencies based on the best agency for the best work at that moment. Over time, that may not be the best solution for the business, and it may not be cost effective."
She declined to comment on the size of the review or fees involved, but said it may well be the single biggest media review in history, and certainly in U.S. history. P&G had $2.6 billion in measured media spending last year, per Kantar Media, but the Ad Age Datacenter pegged the company's U.S. spending at $5 billion, and given the all-in nature of the review and inclusion of Canada and Puerto Rico, the total spending covered by the assignment is likely closer to $6 billion.
The decision to launch the review, which she said was spearheaded by Global Brand Officer Marc Pritchard, was not performance based, she said. The agency selection will be based on a series of strategic business objectives she declined to identify.
The consolidation effort is part of P&G's effort to reduce agency fees and production costs by $500 million annually and will be one of many changes in the agency portfolio to come in the months ahead as the company looks to streamline its roster.
The review won't include any special focus on media rebates or transparency around them, she said, echoing remarks Mr. Pritchard made in March that the company "trusts its agencies" and operates on a "trust but verify" approach on the issue.
~ ~ ~
CORRECTION: An earlier version of the story said the decision on the review will not be performance based. It will, a P&G spokeswoman said, but the decision to initiate the review was not based on the performance of the incumbents.