MEDIA: P&G rethinks its TV tactics - Procter & Gamble’s decision to centralise its pounds 200m UK television buying account into one agency was only a matter of time. Anne-Marie Crawford reports on its likely effects

Procter & Gamble’s media review represents the last stage of a global media structure change by the FMCG giant. Over the past few years, it has been centralising its business country by country.

Procter & Gamble’s media review represents the last stage of a

global media structure change by the FMCG giant. Over the past few

years, it has been centralising its business country by country.



Last November it reviewed in the US and pooled its entire pounds 750m TV

planning and buying account into TeleVest. The prize in the UK is not

quite as large but nonetheless significant in money and prestige for the

victor.



The business is currently split between two of its roster shops, Saatchi

& Saatchi and Leo Burnett, which share the buying and scheduling. These

two will be joined by P&G’s other roster agencies, Mediapolis, MediaVest

and Mediacom, for pitches in September.



Specialist pitches



P&G is also inviting its agencies to pitch for other media tasks, such

as press, radio and outdoor. These will also take place in the

autumn.



’The idea is to appoint one agency of record per medium,’ says a

director of one of the roster agencies.



P&G is a notoriously tight-lipped company. Bernard Balderston, P&G’s

media manager and the man who sets the framework for all media deals,

declined to comment on any aspect of the review. But others see the

wisdom behind the review.



’P&G is a very strategic company. They work years and years in advance

and I’m sure it’s long been their ultimate plan to rationalise to one

agency,’ says one ITV contractor.



He adds: ’At the same time, they reduce their running costs and the

amount of contact time is better spent with one person than two.’



’This is about saving commission and cutting costs,’ says an ITV sales

house director. ’The way P&G negotiates and buys airtime, there are not

many more savings to be made. But it can cut the commission it pays to

its two buying agencies by putting the business out to competitive

tender.’



Cost is clearly a major driving factor behind centralisation. As P&G

comes under pressure from retailers, its stated aim is to double the

size of its business every seven years. This means an annual growth rate

of 12%-13% and a constant squeeze on outgoings.



But P&G has also realised that part of the route to achieving this goal

is better media planning and buying and is driving this ethos through

all key markets.



Moreover, in a changing media landscape, P&G is aware it can no longer

rely so heavily on expensive prime-time TV advertising and has therefore

been diverting spend into other areas such as radio, print and new

media.



Nevertheless, for the time being at least, the focus is very much on the

glittering TV prize, which many observers expect Leo Burnett to

land.



Yet whichever agency eventually carries off the TV business is unlikely

to gain control of negotiations. This remains Balderston’s domain - to

the evident frustration of some of the sales houses.



Closed doors



’The total interface with P&G media is with Bernard and he’s not very

open minded. You can’t get to a brand person who might have a more

helpful attitude,’ says one sales director.



Nor is there likely to be any shift in the company’s policy of driving

down costs. According to one ITV sales director, P&G is spending more

money on Channel 5, GMTV and cable and satellite because they are

cheaper.



’They’ll just pull off ITV for a couple of months if they don’t like the

price, daypart or volume. After a couple of months, it can start to

hurt,’ adds one sales director.



In a cut-throat and competitive environment, this hard-nosed attitude is

unlikely to change.



Profile, page 20



P&G FACTS

Budget spent on TV: 90%

ITV yearly spend: pounds 100m

Plans: Chairman and chief executive John Pepper revealed last year that

P&G intends to shave dollars 1.25bn (pounds 770m) off its costs this

year.