Procter and Gamble’s roster shops are bracing themselves for a period of
austerity after news that the fmcg giant is to raid marketing budgets to
fund a lower price strategy on some of its major brands.
P&G dismisses as ‘rubbish’ reports that it plans a 10 per cent cut in
media expenditure in the UK. However, some agencies have already
reported a 10 to 15 per cent cut in media spend, while others are
predicting a sharp downturn in promotional campaigns.
The US-based multinational plans to reduce marketing support from one
quarter to one fifth of sales value by the end of the decade. Observers
do not expect the adspend cutback to begin to bite until the end of the
year, and anticipate that UK spend this year will be similar to 1995’s
pounds 162 million budget.
However, one media owner said it was already monitoring P&G’s spend
levels carefully because the company had made certain commitments which
it appeared not to be meeting so far this year. ‘It hasn’t come to us to
talk about the cuts,’ the media owner said. ‘We shouldn’t have to chase
it to get a response on this - it’s a serious matter that it needs to
P&G’s UK agencies - Saatchi and Saatchi, Grey Advertising, Leo Burnett,
Euro RSCG Wnek Gosper, Mellors Reay and D’Arcy Masius Benton and Bowles
- have been on a belt-tightening exercise for some time.
Shops have already come under pressure to use more international
commercials and reduce their production costs (Campaign, 15 September
P&G’s head of media, Bernard Balderston, was unavailable for comment.