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
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.
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
’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
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
Nevertheless, for the time being at least, the focus is very much on the
glittering TV prize, which many observers expect Leo Burnett to
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.
’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
’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
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