CHICAGO – Kraft Foods is considering reducing the number of agencies handling its below-the-line marketing activities.
A representative of Northfield, Ill.-based Kraft confirmed the company is reviewing agencies for consumer promotion and direct marketing activities and hopes to conclude the process next month, but declined to provide additional details or identify participants. However, agency sources said last week the scope of the re-evaluation extends to all nonadvertising marketing services, including interactive, event and trade marketing and other activities.
Currently, according to these sources, Kraft works with more than two dozen marketing agencies on a project basis. The result of the current review – which includes agencies not presently on Kraft’s roster – may be to reduce that number to as few as three or four “preferred suppliers” of marketing services.
Miller Brewing, which like Kraft is owned by Philip Morris, last year reduced its consumer promotion roster to Zipatoni Co., St. Louis, and GMR Marketing, Brookfield, Wis.
Kraft spent a total of $820 million on media advertising in 1997, according to Competitive Media Reporting. Its spending on below-the-line marketing “is at least as much” as its ad spending, according to an executive with one Kraft agency. Its marketing agencies work on a fixed-fee basis, however, and those dollars spent on promotions are not equivalent to advertising media billings. Much of Kraft’s marketing budget is funneled to the trade, but sources put spending on consumer promotion alone at more than $100 million.
Among the many marketing agencies that have worked with Kraft are Young & Rubicam unit Wunderman Cato Johnson, Chicago; True North-owned Market Growth Resources in Wilton, Conn.; D.L. Blair, a Garden City, N.Y.-based unit of Interpublic Group’s DraftWorldwide; and many independent shops.
– with Stephanie Thompson