General Mills Pays for Play

CHICAGO General Mills has revamped its agency compensation and management structure, giving its two lead agencies more responsibility about how to best market the products they manage, according to the company.

Under the new arrangement, which launched at the beginning of the month, the Minneapolis company’s two general market agencies, Publicis Groupe’s Saatchi & Saatchi in New York and Interpublic Group’s Campbell Mithun in Minneapolis, will be “brand navigators” for the products they handle, working with minority, interactive and other agencies to market those products, said Doug Moore, vice president of advertising and branding for General Mills.

“This is our way of removing what can be complex management of multiple agencies from our [internal] brand managers,” Moore said.

The partner agencies break down mostly along holding company lines. Saatchi’s team includes Bromley Communications in San Antonio for Hispanic ads, Burrell Communications in Chicago for African-American marketing and Publicis Dialog in New York, Dallas, Seattle, San Francisco and Irvine, Calif., for interactive work. Campbell Mithun’s lineup includes Cassanova Pendrill Publicidad in Costa Mesa, Calif., for Hispanic, Marketing Drive in Chicago for retail ads, MRM in Chicago for interactive and Carol H. Williams in Oakland, Calif., for African-American advertising.

The bulk of the company’s media planning and buying are handled by Publicis Groupe’s Zenith Media in New York.

The company, whose products include Cheerios, Betty Crocker, Yoplait yogurt and Nature Valley products, has not changed any assignments with the new structure, Moore said. He also said it was unlikely the two agency groups would cross lines to work on their assignments.

Moore, however, left open the possibility that brands could shift if performance levels were not met over a period of time. Campbell Mithun’s assignments include Betty Crocker, Cinnamon Toast Crunch, Hamburger Helper, Nature Valley and other snacks. Saatchi’s assignments include most cereals, Yoplait yogurt, Pillsbury and Green Giant, among others.

The agencies will be compensated on “reported net sales,” a measure Moore said was independent of couponing and other discounting to determine the success of a marketing program. Compensation will be based on how well the agencies perform against certain sales goals, he said.

“It’s very pure,” Moore said. “We will pay agencies more if we make the goals, and less if we don’t make the goals.” He added the plan included a floor of guaranteed pay for the agencies and a “generous” ceiling for bonus compensation.

Jack Rooney, Campbell Mithun’s CEO, said he was pleased with the new arrangement, saying it provided for more media neutrality than the previous setup. “We’ll be compensated for all of our efforts, where previously new products and other ventures were subsidized by other assignments,” Rooney said. “We will participate financially in their success.”

General Mills spent nearly $650 million on advertising last year, according to Nielsen Monitor-Plus.