WORLD: ANALYSIS - Will the monster marketer put its money where its mouth is?

P&G claims it is embracing creativity, but change may prove slow, John Tylee says.

The presence of Procter & Gamble at this year's Cannes Festival was memorable less for Jim Stengel's spectacular tumble off the awards stage, and more for the fact the company's global marketing chief was seen taking a trip in such unlikely surroundings.

For half a century, the world's biggest advertiser, the owner of such familiar brands as Flash, Fairy, Daz and Tampax, would have no truck with the hedonistic excesses of the annual jamboree.

Now, here was Stengel and some 40 cohorts sitting for hours in viewing theatres and poring over print work. Onlookers claim the P&G team was deeply impressed by much of what it saw.

Of course, it would be a simplification to suggest that Cannes 2003 was P&G's catharsis, the moment when a company so wedded to rule-book advertising and infamous for strangling good ideas at birth underwent a Pauline conversion.

"There's far more depth to what P&G is doing than trying to win a few Cannes Lions," an industry source says.

Nevertheless, this year's festival may well go down as a defining experience for P&G, confirming the belief at its most senior levels that creativity and effectiveness aren't incompatible.

In fact, Cincinnati's encounter with the Croisette was a manifestation of what many see as an emerging climate of openness in an organisation whose sheer size has bred unnecessary secrecy and insufferable arrogance.

While Stengel has become the most public symbol of such change, he's regarded as just part of a different mindset that is much more PR focused and willing to embrace outside ideas.

"By going to Cannes, P&G sent a signal to the creative community that it was serious," the boss of a P&G roster shop says. "It cleverly made it clear that it wanted the best creatives, who normally wouldn't touch a P&G brief with a bargepole, working on its business."

P&G's networks include Leo Burnett, whose P&G brands include Max Factor and Always, Grey Worldwide, which, among others, holds Lacoste and Pringles, and Saatchi & Saatchi, on the roster for brands including Secret and Head & Shoulders. They began noticing a change three years ago when P&G moved away from paying commission to a percentage of sales, indicating more willingness to treat agencies as business partners.

Moreover, an emerging creative culture in its great rival, Unilever, has not gone unnoticed at P&G. However, many trace the roots of the change back to Operation 2005, a huge restructure driven by P&G's former chief, Dirk Jager, which saw the loss of 25,000 jobs and the culling of many marginal brands.

With hindsight, P&G chiefs acknowledge that Operation 2005 was rightly planned but wrongly executed, over-reached itself and stopped P&G doing many of the things it had always been good at.

The change of emphasis from country management to global business units was less than satisfactory. Senior executives of P&G's Geneva-based European operation were setting ad policy for the UK but when it came to local implementation, the result was often confusion and duplication.

Jager's replacement, Alan Lafley, slowed the pace of change. This strategy is already paying dividends. In a series of strong quarter figures, the latest shows a 5 per cent jump in earnings to £597 million.

Meanwhile, agencies are seeing greater efforts by the company to get them working more effectively on its behalf. Hence this year's descent on the French Riviera.

"Stengel came away realising that there was a requirement for advertising to be watchable and memorable and that much of P&G's output was neither of these things," a senior executive at a P&G agency says. "They learned that award-winning work didn't have to be off-the-wall."

Does that mean P&G is now so far down the road to creativity that to reverse the process would be like trying to squeeze the toothpaste back into a tube of Crest? "P&G will always evaluate and measure advertising," an insider says. "But it will want to see its test methodologies evolve."

For the moment, P&G agencies with memories of high-handed treatment and bureaucratic approval processes aren't raising their hopes too high. "It's early days and it will take time for the work to come through," an agency senior staffer says. Another still has concerns that P&G's systems will be forever tied down by red tape.

"Unlike many clients, P&G people are good at spotting ideas quickly and don't make you jump through hoops," he comments. "The trouble is that too many of the ideas that go in the front fail to come out at the back."

But there are promising straws in the wind. Grey executives admit that a recent TV spot for Flash Antibacterial Wipes featuring a dog licking its genitals wouldn't have got beyond first base a year ago.

What's generally agreed is that, by the time the ad world reconvenes in Cannes next year, P&G will have had to produce tangible evidence that it means what it says.

As one agency boss puts it: "By next year there has to be creative teams roaming the town telling everybody that they won't believe what fantastic scripts they're about to shoot for P&G."

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