Sources said last week that P&G could start realigning agency assignments for its $2.6-billion global ad budget as early as this fall. The company's four main global shops are D'Arcy Masius Benton & Bowles, Grey Advertising, Leo Burnett and Saatchi & Saatchi. Tatham Euro RSCG also handles some international P&G business as well as business in the U.S. P&G's other shops in the U.S. include Wells Rich Greene BDDP, Ayer, Lotas Minard Patton McIver/ N.Y. and Jordan, McGrath, Case & Taylor/N.Y.
"(P&G) used to coordinate advertising on a country by country basis; now it's on a regional basis," said one agency source. "The next step is to go global."
Another industry insider familiar with the mass merchant said "there's no question" that a global shift of agencies is currently on the table at the company. "The question is how they do it. It would be very difficult to implement," he said. Any calls for advertising agency shifts from Procter & Gamble are likely to emerge from the internal task forces operating under the banner "Strengthening Global Effectiveness."
While company management has reportedly been considering a global advertising realignment for some time, sources said the SGE task force on advertising-- as well as the others--are likely to wrap up their reviews and issue reports by the end of the summer.
These internal teams began operating last December. P&G has pulled many of its top line executives to work on the SGE task forces, housing them in a different part of the building at P&G's Cincinnati headquarters and giving them marching orders to improve the business.
One source at a Procter & Gamble advertising agency said he expects the company to realign its shops so that P&G will have two agencies working on a single global brand or trademark. An example of this type of consolidation could be found on Crest, where DMB&B, Leo Burnett and Saatchi & Saatchi all handle pieces of the brand under the Crest, Crest Complete or other brand names worldwide. In the new setup, P&G would likely go with only two global agencies to handle its toothpaste business around the world.
Another global brand which is ripe for a major consolidation, said sources, is Oil of Olay, which is handled by Wells in the U.S. and three other agencies around the world.
The Oil of Olay agency lineup could end up resembling Max Factor, whose dual-agency setup is viewed as something of a test inside P&G. Max Factor's U.S. agency is Lotas Minard Patton McIver/N.Y. while Leo Burnett handles the business worldwide. Overseas, Burnett basically adapts and places the advertising created by LMPM.
Using this arrangement, P&G has rolled out a $50-million global relaunch of Max Factor around the world as Max Factor International, an effort that features a global TV and print campaign translated into different languages in different countries. "If you fast-forward 25 years from now, I can't imagine anyone not advertising on a global basis," observed Kevin Price, senior partner for the Westport, Conn.-based Marketing Corp. of America. "As usual, P&G is ahead of the game."
If P&G does launch a major realignment, it would represent a major cost-savings for its global agencies. "'You would have several regional offices producing the advertising instead of on a country-by-country basis," concluded one agency executive. "The money saved and the efficiencies gained for us would be huge."
The possible shakeup in P&G's agency lineup comes at a time when the $30-billion consumer products giant is launching sweeping new initiatives across most of its business. With Tide and Cheer with Color Guard the latest brands to come under the plan, P&G's controversial "value-pricing" everyday low price strategy has now spread to roughly 70% of its products.
Copyright Adweek L.P. (1993)