Starcom, Mindshare Pursue Kellogg

NEW YORK Kellogg’s $500 million U.S. media buying review is limited to two roster shops: Publicis Groupe’s Starcom, the incumbent, and WPP Group’s Mindshare, sources said.

Mindshare handles the client’s $100 million buying assignment in the United Kingdom. It successfully defended that business in a September review against Starcom and another roster shop, Aegis Group’s Carat. (Carat handles buying chores for Kellogg in Germany and France, but is not currently a part of the U.S. review.)

Sources said the client has told other would-be participants that the review would be limited to the two roster shops, Starcom and Mindshare, for now, but left open the possibility of revisiting the number of contenders.

“If they don’t get what they want, they will open it wider,” said one source at a nonroster shop who contacted the client.

Kellogg representative Celeste Clark responded via voicemail Tuesday that “no decision has been made at this stage on the number of agencies that will be involved in the review.” She was not available for follow-up questions.

Sources said the review, which Kellogg confirmed earlier this month, is procurement based, and comes at a time when Kellogg is looking to streamline its costs to improve profit margins.

But the company stressed in a conference call with analysts on Monday that ad spending will continue to climb significantly—at a double-digit rate for 2005 and at a pace that will surpass net sales growth for both 2005 and 2006.