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