• by Joe Mandese  @mp_joemandese, July 15, 2004

In a move that sets the stage for a "new world" order in media planning and buying, the planet's biggest advertiser Wednesday selected two very different, but equally strategic media agencies to change the way it communicates with consumers.

"Really, truly we've restructured and designed for the new world and not for the old world and that's why they won the business," Cindy Tripp, associate director of North America media and marketing at Procter & Gamble, told MediaDailyNews Wednesday after naming Starcom MediaVest Group and Carat North America winners of its closely watched communication planning review.

The assignment has huge implications for all concerned - the winning planning agencies, the losing incumbents, North American consumers and the myriad media outlets that will be impacted by changes in how P&G invests billions of dollars in advertising and communications budgets.

From the onset, the review was simply a matter of shifting agency services, but was an overtly stated mandate to reinvent the way the packaged goods giant uses media to communicate with consumers. As part of that effort, P&G has made it explicitly clear that it is looking to wean itself off the kind of cookie cutter media plans that have kept it dependent on traditional media approaches, especially a heavy reliance on television advertising.

"Does it mean that TV is going away? Absolutely not," said Tripp, noting, "Maybe television has a lesser role in some communication plans than it had in the past, and in some places it stays exactly the way it was."

To illustrate the point, she gave an example of two very different P&G brands - Tide laundry detergent and Tampax tampons - which in the past had utilized essentially the same approach to media planning.

"Fundamentally, when you are communicating a message about Tide determent and a feminine protection needs associated with Tampax. Those are fundamentally two different things," she said, adding that the goal of P&G's new communications plans would be to, "Understand when I should communicate and talk to her about feminine protection and when should I talk to her about doing her laundry."

In the end, Tripp, who led the review for P&G, said SMG and Carat were selected because they demonstrated that they understood that approach better than any other agencies in the review, and because they convinced the packaged goods marketer that they could set up the systems and teams that would realize that vision.

The result, she said, would be that "the plans for Tampax and Tide will look very different, because it is driven by the consumer, and that's what's so exciting about it." Not surprisingly, Tripp and executives at SMG and Carat, were loath to get into specifics of why they won or how the accounts would be structured or serviced for competitive reasons, but Tripp acknowledged that the marketer's goal was not simply to improve the way it communicates with consumers, but to lead the industry in changes that would influence how other marketers, agencies and media work together.

While P&G is not the first marketer to embrace the concept of communications planning, it is by far the biggest and most influential. In fact, P&G is known as a so-called "alpha" marketer that can set the tone for industry best practices that other marketers, agencies and media outlets will follow.

The change is momentous because communications planning does not simply impact the allocation of advertising budgets across media, but across a much broader array of marketing communications platforms, including below-the-line services like direct response, promotion and public relations, as well as new and still emerging platforms.

The selection of SMG and Carat mirrors that. Both agencies have been leaders in the drive, conceptually, if not materially. Now they will have billions of dollars in P&G's marketing war chest to throw behind their ideas. SMG, in fact, is deemed the alpha planning agency and has distinguished itself from other big shops of its scale, not merely in its ability to execute media buys, but to think out new strategies and approaches, as well as innovating research and systems that give it a competitive advantage. In fact, it was largely on those ground that MEDIA magazine named SMG its "Media Agency of the Year" for 2003.

SMG was one of the first big shops to create dedicated teams of so-called "consumer contact" planners whom utilize traditional agency account planning techniques and research to understand how consumers relate to both media and brands. The agency's mantra is consumer "engagement" vs. "intrusiveness."

Carat, which ironically was one of the first and biggest pure-play media agencies outside the U.S., is a relatively young media agency brand in North America, but has firmly established itself as a leading thinker and innovator on the subject of communications planning and original consumer research.

In fact, Carat was the first shop to dedicate a communications planning account team to a major worldwide marketer, consumer electronics company Philips.

"If you just stepped back and looked at the agencies involved, and looked at who are the agencies who do strategy really well vs. execution well - innovation vs. status quo - you'd have to put Carat in the bucket of strategy innovation. They're really good at that. That's what they do best," acknowledged one competitor who participated in the P&G review.

Nonetheless, the P&G win was critical for the shop, which has participated in virtually every major media account review in the past year, including American Express', AOL's, and Coca Cola Co.'s accounts - but failed to win any.

But the P&G win now firmly establishes Carat as one of the two most strategically positioned agencies and gives it the tacit endorsement of the world's leading consumer marketer.

Structurally, P&G divided communications planning responsibilities between the two agencies on the basis of North American business lines. SMG got P&G's Fabric Care, Home Care, Health Care and Beauty Care divisions; while Carat picked up Baby Care, pet Care, Family Care and Snacks & Beverages. The billings split slightly favors SMG.

P&G's Tripp said the allocation was based on the strength of what the agencies pitched during the review and that nothing was "pre-determined" heading into the process. Agencies participating in the review said they were permitted to pitch specific areas of business and that none of them expected the account to be consolidated within a single agency, noting that P&G historically has preferred to have a number of marketing services providers in order to gain a broader perspective.

The big loser in the process was Grey Worldwide's MediaCom unit, which along with SMG, was an incumbent media planning agency. MediaCom has been undergoing a restructuring and a repositioning, the details of which are expected to be announced Friday. It's parent , tightly controlled, but publicly traded Grey, also is up for sale.

Havas' MPG unit, which handled P&G's Bounty brand, and Omnicom's Targetbase direct response unit also participated in the pitch.