Procter & Gamble, the packaged-goods giant as well as the industry’s largest advertiser, confirmed Monday that it has completed the North American media agency review it began in May in of this year.
P&G also confirmed that that it has shifted most of its business away from Publicis Groupe’s Starcom MediaVest Group to two other agencies — Dentsu Aegis Network’s Carat (a planning incumbent) and Omnicom Media Group. Of the two, Omnicom Media received the bigger share of business.
A P&G rep confirmed that "Omnicom Media Group will be the primary agency supporting the majority of P&G’s categories, with Carat supporting the others."
In a statement, the rep added: "We’ve been working to raise the bar on brand building to drive brand growth. This has included an extensive effort to upgrade and consolidate our agencies to work with the best. And we’re transforming our media and creativity to grow users through the power of digital technology. As part of those efforts, we conducted an extensive review of our North America media work."
The statement continued: "First, this change will help us reach more consumers with better precision and greater efficiency to grow and create value. Both Omnicom Media Group and Carat demonstrated superior and proven performance in data, analytics, planning, buying, talent, and overall financial value. We are integrating planning and buying, and operating across North America markets to streamline operations and increase efficiency. And we will tailor media capability category-by-category to meet their unique business needs to more effectively reach consumers for their brands. We will see cost savings by simplifying our agency structure and negotiating new rates for the services our brands need today, and continue to reinvest to drive brand growth."
SMG held on to a number of brands that P&G has either divested or is in the process of selling including Duracell, Cover Girl, Max Factor, Frederic Fekkai and a number of other smaller brands. The agency is also said to have retained planning duties in Canada. And it still handles media duties in 41 markets outside the U.S. and is said to retain the largest single share of P&G’s media business globally.
MediaCom, part of WPP also participated in the review and P&G made a point of saying that "Both SMG and Mediacom remain valued roster agencies supporting media in other regions."
The agencies could not be immediately reached or declined to comment referring queries to P&G.
P&G spent more than $2.6 billion on ads in the U.S. in 2014, according to Kantar -- making it the top advertiser in terms of expenditures, although the company spent 14% less last year than in 2013.
P&G said earlier this year it was looking for ways to make the company's advertising and marketing program more efficient, with plans to save $500 million annually going forward.
During a call with analysts in the spring company, CFO Jon Moeller said the firm wants to trim its overall advertising and marketing budget in areas such as fees and production costs for advertising media, PR, package design and development of in-store materials.
The company has been paring down its agency roster -- and that will continue, Moeller said at the time. "We plan to significantly simplify and reduce the number of agency relationships and the costs associated with the current complexity and inefficiency, while upgrading agency capabilities to improve creative quality and communication effectiveness."
This story has been updated with confirmation and additional input from P&G.