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P&G is unveiling three new agency models

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Agency

P&G is unveiling three new agency models

Earth’s biggest advertiser, Procter & Gamble Co., is “piloting” three new agency models that are fast taking over some of its biggest brands in its biggest countries. Among the most notable changes is a new yet-to-be-named multiagency agency led by Publicis Groupe and covering all of P&G’s North American fabric-care business.

That business alone accounts for $525 million in measured US media spending, or about 20 percent of P&G’s $2.7 billion total last year, according to Kantar Media. Saatchi & Saatchi New York CEO Andrea Diquez will head the new unit, according to P&G Chief Brand Officer Marc Pritchard, but it will draw on talent beyond Publicis shops to include WPP and Omnicom shops.

Pritchard is set to reveal details at the 4A’s Accelerate Conference in a panel alongside Publicis Groupe CEO Arthur Sadoun and Debby Reiner, CEO of WPP’s Grey, New York. In an interview last week prior to his panel, Pritchard outlined to Ad Age the company’s new agency models.

The one playing out in fabric care is dubbed “People First” and aims to draw the best agency people for each brand, described as “X Factor talent” by Pritchard.

Another is “Fixed and Flow,” a model that combines an agency-of-record on retainer for most creative work with regular jump-ball projects handed out to a roster of shops for other assignments.

The third new model comes in media, where P&G is bringing more planning in-house, particularly on digital media, as well as more buying (more on that later.)

While Pritchard calls these “pilots,” they’re far from limited-time tests on small businesses in remote locations. They’re intended to be permanent or at least enduring, and available now to any brand that wants to try. They’re taking place on big businesses like fabric care in the US, which used the “People First” model to develop Tide’s four-spot Super Bowl ad campaign in February. The new models already are being applied in P&G’s two biggest global markets – the US and China – with four of its billion-dollar brands, including SK-II, Downy and Gain besides Tide. Pritchard says the company’s fabric care; home care; hair and beauty; and oral-care businesses have been most open to the models so far.

People First

“People First” bears a strong resemblance to the Department W approach Publicis Groupe created for P&G’s biggest customer Walmart in 2016, led by Publicis shops but also including substantial work from independents such as Mono and Lopez Negrete.

The new entity for P&G’s North American fabric care will draw on creatives from Publicis shops Saatchi & Saatchi and Leo Burnett, which previously handled Tide and Gain respectively, and One Pub for shopper marketing. But the business also will get work from WPP’s Grey, which has handled Downy. Omnicom’s Hearts & Science remains handling media, and sibling Marina Maher will handle PR.

WATCH: All the Super Bowl 2018 ads 

The Tide Super Bowl effort was a test case, and a successful one as Pritchard sees it. It drew on creative talent from across Publicis Groupe. But the creative strategy was inextricably linked to a media plan and buy handled by Hearts & Science. It used ads in every quarter of the game to help create a running spoof of all Super Bowl advertising, and in the process amplified Tide’s already big buy of one 60 and three 15-second spots by making people wonder – and tweet about – whether ads from other marketers might be “another Tide ad.” The social-media strategy on game night, including several pre-planned tweets from celebrities, came via independent PR shop Taylor.

Fixed and flow

P&G’s new “Fixed and Flow,” model limits agencies of record to fixed retainers for planned work each year, leaving a flexible budget for other projects that can be parceled out to other agencies. At this point, Pritchard says P&G has no rule of thumb on how much should be fixed and how much should flow into projects.

While the “flow” work will come from a roster, that doesn’t mean they’re already on P&G’s roster. “We’re constantly scouring and scouting for who are the up-and-coming agencies,” Pritchard says, and this model will make it easier for P&G to try hot shops without giving them an AOR right away.

That’s a big change for a marketer whose eyes once seldom strayed from a roster of shops with decades of tenure. But “Flow” doesn’t mean “you’re not committed,” Pritchard insists. “You’re still in a committed relationship with your core partners.”

READ: P&G sees better attitude among digital players but still cuts spends. Why? 

The best example of this already at work comes from China for SK-II, a billion-dollar prestige beauty brand globally and one of the company’s best performers on the topline in recent quarters. Leo Burnett is global agency of record – getting the “fixed” work – but some of the highest-profile ads have gone with the “flow,” including 2016 Cannes Gold Lion winner “Marriage Market Takeover” from Sweden’s Forsman & Bodenfors (then an independent, now part of MDC Partners).

Media model

The third new model comes in media, where P&G is bringing more planning in-house, particularly on digital media, as well as more buying. Planning will lean on work by P&G data scientists and specialists, while in-house buying will be a combination of buys spearheaded by P&G procurement specialists directly from media companies and spanning multiple brands and categories, along with buys handled by individual “brand entrepreneurs” dispersed throughout the company. Pritchard expects that brand-level buying to involve “more optimizing rather than making deals,” with brand managers making changes in real time based on analyzing how previous buys worked.

There’s a common theme of seeking more agility and giving brand managers or directors more authority, both things pushed hard by P&G’s new board member – activist investor Nelson Peltz.

“We need more speed, particularly in the digital world,” Pritchard says.

Recipe for conflict?

More fluid assignments leaping across agency or holding-company lines may seem like a recipe for more conflict, but Pritchard doesn’t see it that way. “If the past is any indication, if you have a team that’s really focused on the core mission of bringing something great to life, everybody rallies,” he says.

Doing more planning and buying in-house might also seem like it requires more staffing at a company that’s been reducing headcount for years. But Pritchard says it just means “repurposing” existing staff.

On the agency side, Pritchard complains that less than half of agency resources are being spent on creative talent. “We would like the majority to have something to do with creative output,” he says.

ALSO READ: P&G is cutting agency fees again. How much is it this time?

But that doesn’t mean he wants to eliminate all the account executives and planners. He just wants more of them “scaled across multiple businesses”. He adds: “We don’t want planners to do the thinking for the account people and brand people. They can do that themselves.”

He’d also like to see more brand people dealing directly with creatives rather than through intermediaries. Helping facilitate that is a growing co-location movement, he says. Grey, for example, now has groups working at P&G offices in Cincinnati, Guangzhou and London.

“The vision we have is the brand entrepreneurs with a creative on one side and a data scientist on the other with their hands on the keyboard making things happen and creating things in real time,” he says.

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