• by July 15, 2004

Three enormous developments today.

Procter & Gamble Co., the world's largest advertiser, completed its North American media review process and chose to stay with Publicis Groupe's Starcom Mediavest Group while also tapping a new player, Aegis Group's Carat, to help it craft integrated communications plans across media. Grey Global Group's MediaCom and Havas' Media Planning Group, both of which had handled some P&G work and participated in the review, lost out, as did Omnicom Group's Targetbase.

The decision is a huge deal on several levels.

Why?

P&G spends $4 billion in the U.S. on all forms of advertising and promotion, and is held up as a marketing model for consumer brands across categories. P&G's actions have the potential to impact the entire fabric of advertising, marketing and media.

When the company's global marketing officer Jim Stengel addressed the American Association of Advertising Agencies media conference in Florida earlier this year, he implored agencies to embrace the urgent implications of consumer control. He said that at P&G, "the consumer is boss." A fitting mantra given today's media landscape. Stengel urged agencies and marketers to go well beyond the 30-second TV spot, to reach consumers wherever they are. That means using all media. And, it means integrated media. It also means architecting communications themes that can be articulated across a variety of platforms--wireless, online, TV, in-store, word-of-mouth marketing, outdoor, and more.

The decision is important for another reason. P&G is charging Starcom and Carat with media planning and communications planning. What this does, essentially, is shift the balance of power from the creative strategists to the media strategists and the communications planning departments. It is no longer a question of "TV will get 'X' amount of money, and print will get 'Y' amount," but the communications planners, aided by an intense amount of research, will determine which channels can effectively target specific audiences for particular products. A new deodorant or fragrance product from P&G's Tremor unit is likely to reach teen girls or boys online, via instant messaging and even cinema advertising. Not so for Pampers and Tide, which have a different target and will require their own diverse array of media channels.

Tim Kopp, Section Manager in P&G's Beauty Division, who's also in the company's business analytics and emerging media units, underscored the need for holistic communications platforms on Tuesday during a panel at Ad:Tech-Chicago.

Yesterday's decision by P&G is significant for another reason. Carat has participated in several high-profile pitches during the past year or so and hasn't scored. With the P&G win, it scored. No one's divulging the billings, but regardless of the financials, it's a psychological victory for Carat and one that underscores a lot of sweat equity on the part of Carat North America CEO David Verklin and his team. Verklin has spoken eloquently on the changes occurring in media today and has been a passionate advocate for change and the use of new media .

Also making news today, Digitas gobbled up Modem Media in a $200 million stock-for-stock acquisition. The merger of the two independents marks the latest in a spate of mergers in the independent online agency business. Aquantive snapped up SBI.Razorfish recently, and Agency.com scooped up Exile on Seventh. Phew. I can't keep up.

On another front, Microsoft Corp., America Online, and Yahoo! today announced a major collaboration to enable connectivity between Microsoft Office Live Communications Server 2005 and the largest public instant messaging networks--those of AOL, MSN, and Yahoo!

This is a big move, particularly on Microsoft's part. In the fourth quarter, Microsoft's Live Communications Server (LCS), which offers instant messaging for corporate users, will connect with AOL Instant Messenger, Yahoo! Messenger and MSN Messenger. The three IM clients will not, however, connect with one another for public use though big companies that use will enable employees to use all three instant messaging services.