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P&G Finds More Room To Improve Ad Agency Costs

P&G, which reported better-then-expected earnings for its first fiscal quarter, has been on a tear to cost-cut across the organization in recent years to boost growth and transform into a leaner company. P&G had previously spent $2 billion a year on agency fees before embarking on a two-year plan to cull the number of agencies it works with for advertising, media, public relations and other services. The company last year reduced its roster of agencies by nearly 40% and reduced agency and production spending by about $370 million, The Wall Street Journal reports. Now it's targeting another $200 million of agency-related savings this year. “After two strong years of savings, we will enter next year still spending $1.5 billion in agency-related marketing costs — still more room to improve,” said Jon Moeller, chief financial officer. “We’ll continue to look for efficiencies in working media with better advertising targeting and earned media campaigns with engaging content.”

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