NEWS: Roster shops on alert as P&G slashes ad budget

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.

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

address.’



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

1995).



P&G’s head of media, Bernard Balderston, was unavailable for comment.



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