P&G’s Euro Cut Puts Heat on JMCP

Pat McGrath Convinced His Shop Can Resist Reassignment Trend
CHICAGO–Procter & Gamble’s removal of more than $100 million in assignments from Euro RSCG Worldwide begs the question of whether its newly acquired Jordan McGrath Case & Partners unit can hold onto the three P&G brands it currently handles.
JMCP principal Pat McGrath said Bounty, Zest and Era will stay with his shop because those accounts are regional in nature and because “we’re doing a great job on the businesses.” McGrath said P&G has not indicated that those brands, worth nearly $80 million in annual spending, will be reassigned.
Given P&G’s brand globalization policy, however, sources said it would be a surprise if JMCP retained its P&G work for more than a year. Euro, in fact, played down P&G as a factor in its buyout of JMCP [Adweek, Jan 25].
P&G’s account management logic has been made clear: Global brands will be assigned to its global shops (Saatchi & Saatchi, Grey Advertising and Leo Burnett). Denis Beausejour, P&G’s vice president of advertising, worldwide, said in a statement that Euro was axed from the global roster because P&G “never reached a critical mass of business with them.”
That does not bode well for JMCP down the line. Although JMCP sets global strategies, Zest and Bounty are handled by other agencies in local markets overseas, and only Era is an exclusively U.S. product.
Euro RSCG Tatham here saw the writing on the wall about three years ago and began to diversify its client base. What was once a stolid P&G shop now handles Red Lobster, Midas and Orville Redenbacher, among others. “We’re not a Procter & Gamble agency anymore,” Tatham president Gary Epstein said last month.
Euro chairman Bob Schmetterer played down the implications of the P&G defections. It opens up the packaged-goods category, he said, noting that P&G represents less than 1 percent of the network’s worldwide billings. Iomega, at Euro RSCG/DSW Partners in Salt Lake City, is a larger client than P&G, he said.
Tatham said projected P&G billings were worth $75 million for 1999, accounting for 12-15 percent of its billings. The possibility of layoffs after April 1 could not be discounted.
Agencies gaining last week: Saatchi won Head & Shoulders in North America and Old Spice in North America and Europe; Grey added Mr. Clean in the U.S.; and Burnett won Metamucil in the U.S. and Europe.