UPDATE: P&G Names Omnicom the Big Winner in Its Media Agency Review

By Patrick Coffee 

We have a very good idea why Publicis Groupe went through its big restructuring last week: Procter & Gamble has completed its media agency review, and Publicis is the big loser.

Omnicom Media Group (OMG) and Dentsu Aegis’ Carat, which has worked with the client for some time, are the winners. We hear that Publicis has officially lost all of the P&G business in North America with the exception of its divestiture brands, so while Starcom Mediavest Group will remain P&G’s primary media buyer/planner outside the United States, it retains only a portion of the P&G brand portfolio within the U.S.–and those pieces of business will soon leave the P&G family altogether.

Over the summer, P&G essentially acknowledged its failure in the beauty space and agreed to sell 43 related brands to cosmetics giant Coty for $12.5 billion. Starcom Mediavest can still claim to retain a majority of the P&G media business worldwide (only 40 percent of the client’s media business is in North America), but it will no longer work for P&G in North America once the divestitures become final.

No one has given us any official statements, and an earlier post on WSJ’s CMO Today blog stated that “It is unclear what responsibilities these agencies will have.”

The business is all new for Omnicom, and prior to the review (which began in May, five months after P&G named a new North American media chief) Carat primarily handled media buying in Canada in addition to “communications planning for some brands in North America.”

In short: big win for Omnicom, big loss for Publicis. And this news goes a long way toward explaining Maurice Levy’s latest rant about silos.

UPDATE: Here are more details from the official statement provided by a P&G representative.

“…we conducted an extensive review of our North America media work, and today are announcing our decision to consolidate to two main agencies–Omnicom Media Group and Dentsu Aegis’ Carat. Omnicom Media Group will be the primary agency supporting the majority of P&G’s categories, with Carat supporting the others.

We are integrating planning and buying, and operating across North America markets to streamline operations and increase efficiency. And we will tailor media capability category-by-category to meet their unique business needs to more effectively reach consumers for their brands. We will see cost savings by simplifying our agency structure and negotiating new rates for the services our brands need today, and continue to reinvest to drive brand growth.

Starcom MediaVest Group will retain Duracell, as well as Cosmetics, Fragrances, Salon Professional and Hair Color in the U.S. and planning in Canada.  Both SMG and Mediacom, who also participated in the review, remain valued roster agencies supporting media in other regions.”

In 2014, P&G spent $2.66 billion on domestic ads, per Kantar Media, down from $3.1 billion for FY 2013.