General Mills is jumping on the media review bandwagon, joining about a dozen other big advertisers that have called reviews in the last two or three months.
Publicis Groupe’s Zenith Media is the long-time incumbent on the assignment. The cereal and snack foods giant spends more than $800 million annually on ads in the U.S., according to Kantar.
Joanne Davis Consulting has been retained to assist with the review process.
General Mills follows a number of other big marketers in calling a media review this spring. Last week was particularly busy on the review front with Johnson & Johnson, 21st Century Fox, Sony, Volkswagen, BASF and BMW all calling reviews.
Recent pitches have also been called by Procter & Gamble, Coca-Cola, L’Oreal, Citi and Unilever. SC Johnson recently consolidated its media assignment with PHD and Barcardi recently awarded sibling agency OMD its consolidated account.
In commentary earlier this week about the recent media review activity Pivotal Research Analyst Brian Wieser said that by his count, some $13 billion in annual media spending has been put in review in the last eight weeks. “This approaches amounts that might be awarded in a typical full year, on our analysis of data from RECMA,” Wieser stated. “As it is, the $25 billion of media agency accounts awarded and likely to be awarded before the year ends -- only including accounts currently in review -- is in record territory.”
It’s likely, Wieser said, that the ongoing rebate controversy is at least a partly responsible for this year’s accelerated review activity.
“While we wouldn’t want to assume that a marketer would simply put their account up for review in order to audit how their agency gets paid, some marketers may have realized that either they didn’t have audit rights or those rights weren’t comprehensive enough,” Wieser wrote. “ Some may simply be angry or were already looking to make a change. Others may have realized there would be no better time to put their agency up for review given the defensive position they would be in with respect to negotiating terms. Certainly, most of these reviews would have happened under any circumstance, but the scale of what is happening suggests to us that the undisclosed compensation issue is contributory. “
Morten Pedersen of Glue2020.com responded that there are other likely reasons for the enhanced activity as well including the fact that “advertisers expect their agencies to seamlessly collaborate with technology and content partners both within and outside the traditional holding group model. Until now, agencies have been reluctant to go down this route, so many clients use the pitch to explore new agency and service models.”
Pedersen noted: “Most advertisers acknowledge that media planning and buying is increasingly built around highly measurable data points, hence they use the pitch to explore long-awaited agency remuneration models shaped around agency output and business outcomes.”
And, he added: “The pricing structure in the US media market is in itself very opaque as there is no view over supply and demand for individual properties. Adding that agency holding group inventory deals are gaining pace, many clients use their pitch to not only beat legacy pricing, but to create a situation where they benefit disproportionately from much cleverer deal structures.”