GSK consolidating its estimated $1.7 billion global media buying assignment with Publicis Groupe effective next year certainly looks like one of those every-three-year, procurement-driven exercises popular among marketers based in Europe. But there's far more to it than that, says Marc Speichert, global chief digital officer for the U.K.-based marketer of such brands as Aquafresh, Theraflu and Nicorette.
Here are five things to know about the decision.
Publicis Groupe wasn't the low bidder
The review, which also included Dentsu and two incumbents – Omnicom's PHD and GroupM – was portrayed as mainly a cost-cutting exercise in some media reports.
"Yes, cost was an element, but certainly not the major driver," Speichert says. "In fact, we had even one more aggressive offer on the pricing side and decided not to move forward with that agency, because we thought it was important to have all the things we were looking for."
Speichert declined to name the agency.
Data and analytics drove the process
"We are driven to become the best data-driven marketer in our industry," Speichert says. "We've taken several steps to evolve internally, but we realize we can't do that all ourselves."
He gives Publicis Groupe high marks for data and analytics capabilities.
It started as four pitches
The original idea wasn't to consolidate with a single agency. GSK started about a year ago with an "agency of the future" project, which led to three regional media pitches -- for the Americas; Europe Middle East and Africa; and Asia, plus a global digital media account.
"We were impressed with Publicis across the four pitches, and ended up with one global solution," says Speichert, formerly a global marketing executive with L'Oreal who later worked for Google with consumer-goods marketers. "Lining up the benchmarks from my L'Oreal and Google days I know what great looks like," he says. "So I felt like we truly had a quality team across the areas."
GSK also works with Publicis Groupe shops on creative, and the consolidated media assignment "does create some interesting possibilities for us to connect the dots," Speichert says. But he adds: "We have no intent of consolidating everything under one holding company."
GSK is bringing media planning in-house
Planning was part of the old media assignments from 2015, but now GSK is bringing that in-house. The marketer has also consolidated programmatic tech with Google, which should aid transparency.
Some media-agency consultants forecast a trend toward marketers separating planning and buying, or bringing planning in-house, to eliminate conflicts of interest. The separation ensures the same people aren't deciding what types of media brands need and then buying it, which can steer dollars toward media that give agencies the best incentives.
GSK's move to in-house planning is driven more by a desire to get more agile and technically adept, Speichert says, adding that it will still lean on Publicis Groupe for some advice.
Transparency concerns have played a more direct role in GSK's programmatic trading technology, he says. GSK has replaced about a dozen demand-side platforms around the world with a single platform from Google's Display and Video 360. Under the old regional hodgepodge, Speichert says, "The agencies were owning the deals with those DSPs, which created some friction points on transparency."
Publicis Groupe's artificial-intelligence system for matching people from its agencies with clients – which became famous when Chairman-CEO Arthur Sadoun pulled out of Cannes and other award shows last year to help pay for it – helped win the account. It built confidence the holding company can assemble from its "People Cloud" the talent GSK wants, Speichert says.