Publishers decry P&G call for cuts

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The nation's largest magazine advertiser, Procter & Gamble Co., renowned for its tough negotiating talk, has found a new way to put the squeeze on publishers.

In a move that has stunned even seasoned observers, P&G's media agency, Publicis Groupe's Starcom MediaVest, Chicago, recently sent a letter to magazines requesting they reduce the number of sales reps who work on the marketer's business. The plan was described by an executive with knowledge of the letter as "P&G's new way of doing business."

The request, which one publishing executive said was a part of a document detailing P&G's print strategy, took that suggestion one step further, though-by suggesting that any savings realized by reducing ad staffs be passed on to the marketer.

"We've asked [publishers] to look at the way they manage our business differently, so we can gain further efficiencies and we can identify opportunities more quickly," said a P&G spokeswoman. "And if that leads to savings on their part, we hope that's passed on to P&G," which she said was "quite simply, part of being a good partner."

Magazine executives did not see it that way. One, who'd not seen P&G's missive, called the move "more than aggressive-it's an inappropriate intrusion" and wondered how the marketer would feel if publishers made such demands of P&G.

The P&G spokeswoman denied that the company had, in effect, directly asked publishers to cut their ad sales staffs.

"These guys are playing the most serious hardball out of anyone playing hardball," said another senior magazine executive. This executive said P&G had begun refusing to pay ad increases based on raised rate bases-the circulation guaranteed to advertisers-until they could review statements the company submitted to Audit Bureau of Circulations, a tactic the executive said was highly unusual. (A company spokeswoman had no immediate comment on this executive's statement.)

starcom role

In May, Starcom MediaVest Group formed SMG/P&G, a division of the agency that manages all of P&G's U.S. media planning assignments that were previously with Media-Vest USA, Starcom USA and Saatchi & Saatchi, New York.

MediaVest handled TV planning and buying, with Starcom handling print planning and buying. Saatchi handled broader media planning for the many P&G brands it handles, including Pampers, Tide, Iams and Olay. The planning group, with offices in New York and Chicago is organized around specific brand categories, and is aligned with P&G's internal categories. When the unit was formed, Greg Ross, director of media for P&G North America said it was "consistent with our plans to move aggressively beyond traditional media thinking and embrace a holistic consumer communications platform." (Read more: QwikFIND aao69r.)

P&G's missive to magazines was first reported in the Chicago Tribune. A Starcom spokeswoman directed inquiries to P&G.

contributing: richard linnett

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