One Shakeup Deserves Another

Agency consolidation usually brings problems for global clients, particularly in terms of conflicts. But Procter & Gamble saw Publicis Groupe's decision to dissolve D'Arcy Masius Benton & Bowles as a chance to make changes of its own. Still, P&G's decision last week to reassign three dozen brands followed months of internal debate. "It's not a science; it's a bit of an art and a science. We had lots of iterations and discussions and meetings," said Jim Stengel, global marketing officer at the Cincinnati-based company. In all, 36 brands were reassignedwith combined U.S. billings of more than $500 million. Four Publicis Groupe shops won the lion's share: Saatchi and Publicis ($190 million each), Leo Burnett ($70 million) and The Kaplan Thaler Group ($60 million). Grey added $35 million. The big loser was Havas' Arnold Mc Grath, which lost all $65 million of its P&G billings. Of the 36 brands, 15 are overseas only. Publicis approached P&G this summer about shuttering D'Arcy, and the client saw it as a possible catalyst for refocusing its efforts to form a more coherent and global agency roster, said Stengel. Publicis made D'Arcy's demise official just weeks after its $3 billion acquisition of Bcom3 was approved Sept. 24. Stengel said he recognized the efficiencies of working with just two holding companies, Publicis and Grey. "We wanted critical mass and scale with two groups," he said.Global brands go to Saatchi (Crest), Publicis (Metamucil, Char min and Vicks) and Grey (Zest). Burnett adds no new global assignments. The wind fall at Publicis Groupe was the result of heavy lobbying by CEO Maurice Lévy, president Roger Haupt and Saatchi CEO Kevin Roberts, sources said. Overall, the consolidation positions Roberts and Neil Kreisberg, executive managing director at Grey Global Group, as the key managers of P&G's business. "Their role will be to help us with issues with the companies that span all the brands," Stengel said. As such, Roberts has proposed that Publicis Groupe create a committee to oversee all its P&G business, said a source. It would consist of account and creative heads from all four agencies handling P&G business, the source said. Kreisberg said Grey has no such plans and that the operating structures already in place to service the agency's largest client are "historical and successful." In addition to Crest, Saatchi picks up Fixodent, Luvs disposable diapers, Folgers, Millstone and several overseas healthcare brands. Publicis adds $90 million in U.S. healthcare billings from brands such as Vicks and Therma Care. It also picks up another $100 million from family-care brands such as Bounty paper towels, Charmin toilet paper and Puffs tissues. Burnett, which handles Tampax and Max Factor, adds beauty-care brands Always, Alldays in all markets and Mum and Camay in Latin America. It also adds fabric and home care brands Bounce, Era and Fairy laundry detergent to the Cheer and Gain laundry detergents it already has. It will share Swiffer and Dawn dishwashing liquid with Kaplan Thaler in New York, with the latter likely to handle domestic duties and Burnett international. P&G inherited Kaplan Thaler when it purchased Clairol. Giving it two brands in a new category is seen as a big vote of confidence—and the arrangement also avoids possible conflicts with Uni lever household business at Publicis. The plan was fluid throughout last week. At one point Burnett looked set to pick up D'Arcy's health care brands, but they went to Publicis so staffers wouldn't have to move to Chicago, sources said. The client did identify executives who might be "valuable" to move with their brands. But Stengel noted, "Nothing can be guaranteed." Publicis Groupe's only loss is the $20 million Torengos chip account to Grey, which handles Pringles globally. Grey also handles the bulk of P&G's personal care business, which is why it got Zest, Stengel said. Arnold McGrath in New York which had only a few brands, saw them move to shops controlled by Havas' Paris rival Publicis Groupe. "We like to be at a point where we have critical mass and size with the holding companies," Stengel said.

Brand Marketing

One Shakeup Deserves Another

Aaron Baar

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Aaron Baar