True North and WPP units may have fallen short in Kraft North America's media consolidation, but the companies came up winners in the client's creative reshuffling.
To have "deeper, richer and unique agency partnerships," the Northfield, Ill., company consolidated most of its U.S. and Canadian creative assignments at three agencies: TN's FCB Worldwide, WPP's Ogilvy & Mather and J. Walter Thompson, while handing its $800 million U.S. and Canada media planning and buying account to Bcom3's Starcom MediaVest Group, said Barbara Ford, Kraft's vice president of advertising.
"We're wanting to do a better job at media-neutral agency communications," Ford said. "That would seem to be fulfilled by identifying some corporate strategic partners."
SMG's media account will be handled out of the shop's Chicago, New York and Toronto offices. Sources said it will be considered a MediaVest client to avoid a possible conflict with Starcom's work for Kellogg.
"The assignment is going to be accountable through MediaVest," said MediaVest USA ceo Donna Salvatore. "There will be components that will be managed through the [Starcom] Chicago office."
Senior vice president/media director Bill Tucker will oversee the business, and will have accountability for every piece of this [relationship] in North America.
Despite the presence of FCB/TN Media and Omnicom's OMD/Canada in the media review, sources said the contest ultimately was a "two-horse race" between Bcom3's SMG and WPP's Mindshare.
Some sources pointed to Kraft parent Philip Morris as a key factor in favor of SMG, noting that Starcom USA handles PM's corporate planning and buying as well as planning and buying for subsidiary Miller Brewing Co. Don Miceli, Kraft's vice president of media services, dismissed that notion. "They were not a driver in the review, and they did not make a suggestion in any way for the review," Miceli said.
"It was a MediaVest-led pitch utilizing SMG resources," Salvatore said. "We had the support of SMG management and any of the tools we needed."
SMG's win may coun-ter losses incurred by sister Bcom3 company Leo Burnett in Kraft's creative brand realignment.
As part of the new creative agency assignments, Burnett will lose creative duties for Velveeta and Kraft pourable salad dressings, which will move to FCB.
Also losing in the realignment is Young & Rubicam, New York, which will lose its U.S. Crystal Light powdered soft drink and Balance Bar assignments to Ogilvy, and its General Foods International Coffee business to FCB.
Burnett and Y&R kept some low-spending brands. Burnett will continue to handle advertising for Altoids, while Y&R hangs on to the company's Toblerone and other chocolate brands. Kraft spent $13 million on Altoid advertising and $5 million on Toblerone last year, according to Competitive Media Reporting.
In Canada, Ogilvy will pick up the International Coffee and Kool-Aid accounts from Y&R and Post cereals from BBDO/Toronto. FCB earlier picked up Y&R's Jell-O account.
The realignment does not affect any of Kraft's recently acquired Nabisco brands, company officials said. It was unknown how those brands might be divided.
Kraft was also believed to have changed its agency compensation plan in the restructuring. Agencies will remain on commission with incentive bonuses, sources said. However, they expect to receive less of a revenue boost from the added business under the new system.
Company officials declined comment on compensation arrangements.
Miceli and Ford said the realignment was not executed as a way to compensate TN or WPP for coming up short in the media review.
"A decision was not made on the goal of each of them receiving a piece of the pie," Miceli said.