Procter & Gamble has put its Chinese media business, estimated to
be worth more than $500 million, up for review. Starcom and Mediacom are
the lucky agencies shortlisted to compete against the incumbent, Zenith,
for mainland China’s biggest media account later this year.
Given its enormous spend, P&G’s media account is a crucial tool for
leveraging an agency’s positioning and buying power in China. Zenith’s
two rivals are relative newcomers to the region - Starcom’s Chinese
operation was set up only this year and Mediacom was established in 1995
- making the stakes even higher for these competing agencies.
Zenith Media has held the P&G account in China for eight years - if you
include the period before its 1996 launch, when the business was handled
by Saatchi & Saatchi’s media division. As the biggest fmcg marketer in
China, P&G’s total spend accounts for more than a third of Zenith’s
billings in China - and Zenith, which has Coca-Cola on its roster, is
not short of big-spending Western imperialist clients.
Based in Guangzhou, P&G China has 17 brands in eight product categories
including Rejoice, Pantene, Head & Shoulders, Safeguard, Oil of Ulan,
Crest, Whisper, Tide, Pringles and Pampers. Creative advertising for all
the brands is split between Saatchi & Saatchi, Grey and Leo Burnett.
Zenith and MindShare are currently the biggest media players in China -
armed with flagship accounts like P&G and Unilever respectively - and
Zenith is desperate to hold on to its position.
Antony Young, Zenith Media Asia Pacific’s chief executive, acknowledges
the significance of P&G’s move. ’We are taking this review very
seriously,’ he says, adding bullishly: ’Reviews on P&G are normal
business practice and something we constantly face in the business. We
are confident of putting together a compelling case to retain Zenith
The review has fuelled speculation that P&G could be considering
splitting its Chinese account, either geographically or by brands.
Tellingly, when P&G unveiled its Organisation 2005 plan in June, it
revealed that the implementation of global business will be based on
product knowledge rather than geographic location.
Since P&G opened its mainland China operation in 1988, demand has grown
to provide P&G with one of its top three global markets, with more than
$3 billion invested each year in media buying.
P&G’s strategy for China has so far focused on nationwide media coverage
but the entire industry is getting more complicated. In order to build
closer ties with major media owners such as China Central Television,
Zenith and P&G have co-organised seminars and tours to the US for
Chinese TV stations with the aim of improving TV programming and
Sources suggest that P&G is keen to increase its direct negotiation with
media owners, particularly TV, leaving the winning agency to handle
planning and strategy.
Iris Lai is assistant editor at Media (Asia).