2009 Festival of Media

P&G, Coke Say Now's the Time to Get Closer to Media Agencies

Both Marketers to Continue Spending During Recession

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VALENCIA, Spain (AdAge.com) -- Two of the world's biggest marketers called for closer relationships with their media agencies while also saying the shops need to be more innovative today at the Festival of Media.

Bernhard Glock
Bernhard Glock
Bernhard Glock, VP-global media and communications at Procter & Gamble, and Maarten L. Albarda, director-media and communication innovation for Coca-Cola Co., got the attention of a lethargic crowd that was visibly shaking off the cobwebs by proclaiming that both companies were going to continue to spend through the recession and that the current situation presented an opportunity for agencies to bolster and improve their relationships with them.

"P&G is committed to continue spending behind its branding efforts," Mr. Glock said. "And we need to work hand in hand with our agencies during this time. [Our approach with agencies] is to simplify our work, the decision-making process and structure in order to develop and free up capacity for innovation. We live in a world of change and we must adapt, because if we don't, we get [forced to] change, and I would rather [drive that] change than be changed."

One area in particular that P&G will be looking to increase its investment is in sustainability, or environmentally friendly products. Mr. Glock said the company's goal was to have an investment of $50 billion dollars in sustainable and innovative products by 2012, doubling its current investment.

More 2009 Festival of Media Coverage:
Starcom MediaVest Named Media Agency Network of Year
Digitas USA and Microsoft Also Get Top Prizes
Media Agencies Still Figuring Out Multiplatform Buys, Social Media
But Top Managers Say Progress Is Being Made on Both Fronts
Havas CEO Sees At Least Two More Years of Grey Skies
Fernando Rodes Vila Calls for Focus on Green Initiatives in Meantime
Unilever Wins Two Awards for Axe, Dove Media Campaigns
OMD, MediaCom Also Big Agency-Side Winners at Festival of Media

'Value, not complexity'
Both companies work with a number of agencies and stressed that all the shops need to be on the same page and not muddy up the waters with turf wars. "Collaboration is vital and everyone needs to be adding value, not complexity," Mr. Glock said.

Mr. Albarda said one of his pet peeves, of which he rattled off many, was an agency partner that constantly claims to be a one-stop-shop for all of his company's needs.

"I hate the 'yes we can' attitude from the agencies we work with, claiming they can do everything," he said, noting that he appreciates the enthusiasm but appreciates honesty even more. "Let's be honest with each other and tell me what you're good at. If you can't handle something, tell me I should look to another one of my shops for that assignment."

Mr. Albarda said that based on Coca-Cola's "360-degree" approach to integrated marketing communications, the company interacts with its consumers at numerous touch points and its media agency partners need to be proficient at working in all of those spaces.

Maarten L. Albarda
Maarten L. Albarda
"Our principles for connection planning are to create consumer-centric and media-neutral programs," Mr. Albarda said. "Connection planning goes across all touch points, and media agencies need to have the ability to work across all of those touch points. We want effectiveness to lead to more efficiencies, and vice versa."

Protecting budgets
Asked if he was squeezing his agency partners during the economic downturn, Mr. Albarda said it was the budgets they were squeezing, a word he didn't think necessarily best described their actions. "'Nurture' or 'protect' is the right word," he said. "We're trying to maintain them and keeping investments relatively flat."

He cautioned agencies about getting too hung up on their budgets to gauge their place in the food chain, especially when they are among many others working for a marketer. "Don't look at budgets to determine position or relative strength," Mr. Albarda said.

The issue of compensation is one that has been discussed frequently at the festival for the past two days, and an audience member raised the topic once again to Mr. Glock. The P&G exec said it was currently looking for different ways to evaluate compensation for its media-agency partners, noting that they were currently based on a variety of performance indicators. P&G's ad agencies are compensated solely on performance and sales, he said.

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