P&G Cuts Agency Budgets as Publicis Restructures Its Production Department

According to two people with direct knowledge of the matter, the move also involved a round of layoffs.

“Publicis continues to position our agency for the future and unlock smart, agile and strategic solutions,” read a statement from a Publicis Communications spokesperson. “We’re being mindful about our moves in New York, which include restructuring resources to better serve clients and better deploy talent.”

One person who was among those let go told Adweek that a primary reason for the change was a decision by Procter & Gamble, the world’s largest advertiser and one of Publicis Groupe’s most important global clients, to cut or reduce production work on its ad campaigns.

As part of the move, the two sources said several executives, including the head of production at Publicis New York and at least one executive producer, were also laid off.

Jenny Read, who joined Saatchi & Saatchi New York in 2017 as director of integrated production, will now reportedly oversee the teams at that agency as well as Publicis New York and PG One, the holding company’s dedicated P&G unit.

It is unclear at this time how many employees were affected overall. Publicis declined to elaborate beyond the statement above, and a Saatchi & Saatchi representative declined to comment.

P&G deferred to Publicis for comment on agency operations but clarified that it had “embraced more efficient ways of production” rather than taking more production work in-house.

P&G’s chief marketing officer Marc Pritchard has made several major changes to the CPG giant’s agency lineup and larger marketing strategy in recent years. At the 4A’s Accelerate conference in Miami this April, the company announced that it will pioneer new agency models including one group that will handle its fabric care brands by drawing talent from Saatchi, WPP’s Grey and Omnicom’s Hearts & Science and Marina Maher Communications.

Pritchard described it to Adweek as “an interactive agency that focuses first on people.” He also said that P&G will still rely on its agency partners to handle creative work.

According to sources who spoke to Adweek, however, the company’s plans to cut production budgets have been in the works for some time. P&G’s ultimate goal is to streamline its global marketing spend.

This latest move is in keeping with Pritchard’s much-discussed strategy for reducing waste and increasing efficiency by demanding greater transparency from its media partners, cutting its digital spend and reducing production costs.

In March, P&G’s top competitor Unilever also told investors in its 2017 annual report that it had saved approximately 30 percent on agency fees by bringing more of that work—including production—in-house.

P&G spent nearly $2.7 billion on paid media in the U.S. last year, according to Kantar Media.

This story has been updated to include the client’s clarifications.