Procter & Gamble adopts bolder advertising strategy to boost sales

<p>In the wake of last week's 30-point plunge in its share price on </p><p>the New York Stock Exchange, Procter and Gamble's decision to emphasise </p><p>integrated marketing, might, industry observers said, be more of a </p><p>cost-cutting exercise rather than a long-overdue change in </p><p>direction. </p><p><BR><BR> </p><p>The latest of a series of revolutionary moves on the P&G account sees </p><p>the Cincinnati-based conglomerate opening up brand planning and </p><p>development to all of its external marketing and promotional resources </p><p>in the first stage of planning, as of July 1, 2000. </p><p><BR><BR> </p><p>Previously, roster agencies Saatchi & Saatchi, Leo Burnett, D'arcy and </p><p>Grey received first-call briefing on a total annual adspend last </p><p>estimated to be in the region of US$3 billion. </p><p><BR><BR> </p><p>As reported in the Chicago Tribune at the end of last year, this latest </p><p>initiative invites P&G's public relations, direct marketing, promotions, </p><p>merchandising and interactive consultancies and a further US$1.6 </p><p>billion worth of promotion spend, to sit down with roster agencies at </p><p>first stage briefing with all the money on the same table. </p><p><BR><BR> </p><p>The move was viewed by many to be another indication of the company's </p><p>commitment to both integrated marketing and greater competition among </p><p>its external marketing divisions. </p><p><BR><BR> </p><p>Timed to coincide with the radical July 1 move to a fee and bonus </p><p>related remuneration system for the company's roster agencies, the new </p><p>era of quantifiable advertising results appeared to be well and truly </p><p>established on the P&G account. </p><p><BR><BR> </p><p>And, in an unusual twist, the generally perceived "10 miles of bad road" </p><p>creative view of the P&G account, might be turned on its head by the new </p><p>initiatives. </p><p><BR><BR> </p><p>On the premise that the best creative work produces the best results, </p><p>agencies which do not or cannot put excellent creative resources behind </p><p>the account, suggested Craig Davis, regional creative director for </p><p>Saatchi and Saatchi Asia-Pacific, stand to lose out. </p><p><BR><BR> </p><p>According to Mr Davis, "The creative door is open" on P&G accounts. What </p><p>remains to be seen was whether the agencies can come up with the </p><p>goods. </p><p><BR><BR> </p><p>"In the past, P&G did a very good job of looking at what they had </p><p>achieved and what had worked. Reapplying previous successes meant that </p><p>in some cases agencies were working almost to formula. </p><p><BR><BR> </p><p>"There was no question that P&G recognised that it might have been </p><p>missing opportunities as markets started to develop and other </p><p>competitors came in." </p><p><BR><BR> </p><p>P&G sent shock waves through the industry in 1998, when the company </p><p>embarked on a radical internal restructuring programme overturning </p><p>purportedly written-in-stone dictates, which governed every area of the </p><p>FMCG giant's operations. </p><p><BR><BR> </p><p>Speculation among industry onlookers and the world's press has been </p><p>rife. </p><p><BR><BR> </p><p>It seems most likely, however, that changes came about in response to an </p><p>increase in velocity of its downward-moving share values, which if left </p><p>unattended had the potential to knock the world-wide market leader out </p><p>of the number one slot in its leading categories and markets. </p><p><BR><BR> </p><p>Concern over decreasing share values led to the implementation of a </p><p>wide-range of organisational temperature-gauging exercises, which </p><p>covered all areas of operation, including external marketing resources </p><p>(P&G's agencies) and the creative work being produced. </p><p><BR><BR> </p><p>What they found, said Mr Davis, was that "their agencies' best work was </p><p>not on their business (and) the agency's best people were not always </p><p>working on their business." </p><p><BR><BR> </p><p>Employing high-profile creatives on P&G accounts has been a long- time </p><p>policy for Leo Burnett, which in the new guise of BDM now holds 50 per </p><p>cent of P&G's global business. </p><p><BR><BR> </p><p>According to Andrew Bell, who moved into Leo Burnett's newly-created </p><p>role of regional creative director responsible for P&G hair care based </p><p>in Thailand last year, "The need has been voiced for brands to stand out </p><p>from the crowd in a more meaningful way. Our clients are being asked to </p><p>take risks and make decisions based on gut feeling. </p><p><BR><BR> </p><p>"The production of rough test commercials is becoming rarer. Our clients </p><p>are more inclined to air and test later." </p><p><BR><BR> </p><p>Having been recognised as generic to the category (as opposed to brand </p><p>defining), so-called identifying hair shots are gradually disappearing </p><p>from P&G's TV commercials". </p><p><BR><BR> </p><p>Finer points such as content requirements of hair shots and See-and-Say, </p><p>plus testing procedures such as OAT's and Quick-and-Roughs are the thin </p><p>end of the wedge when it comes to improving creative standards and </p><p>business results in the world of P&G advertising. </p><p><BR><BR> </p><p>One of the biggest differences - reflecting what Saatchis regional </p><p>planning director for P&G, Danny Logue, described as a fundamental </p><p>attitude shift - is the re-framing of OAT's as a learning and </p><p>development tool that might now happen after the event, rather than a </p><p>pre-requisite which must be passed before a television commercial can </p><p>run. </p><p><BR><BR> </p><p>The changes at P&G might yet prove to be a bit unsteady, but one that, </p><p>if they can hit the bulls eye, will pay well for the FMCG global </p><p>giant. </p><p><BR><BR> </p><p>As the Chicago Tribune suggested at the time of the announcement, new </p><p>moves at P&G favour integration which, among other things, typically </p><p>leads to an increase in below-the-line activity. </p><p><BR><BR> </p><p>This in turn would favour agencies, like BDM (Burnett, Dentsu, McManus), </p><p>which through its union with PR leaders Manning Selvage and Lee can </p><p>display substantial integrated expertise. </p><p><BR><BR> </p><p>With the new compensation structure due in place by the middle of this </p><p>year, P&G and their roster agencies will, in the words of Saatchi's Mr </p><p>Davis, operate far more as partners than just as agency and client. </p><p><BR><BR> </p><p>"There's a competitiveness to this new era and Saatchis would like to be </p><p>the agency that makes the most of it." </p><p><BR><BR> </p><p>In the long run, the increased emphasis on integration may prove to be </p><p>another kick-in-the-teeth to above-the-line and the creation of TVC </p><p>advertising. </p><p><BR><BR> </p><p>In the short term, however, opportunities to improve the quality of </p><p>creative produced on P&G accounts, are deemed by all to be </p><p>increasing. </p><p><BR><BR> </p><p>As Mr Davis put it, "It's for the agencies now to take that opportunity </p><p>and turn it into something". </p><p><BR><BR> </p><p>Carpe-Diem or 'seize the day' may be the motto for P&G roster agencies </p><p>now, however, whether this translates into higher stock prices remains </p><p>to be seen. </p><p><BR><BR> </p>