P&G relaxes strict stance on conflict

Procter & Gamble has confirmed it is to ease its tough conflict policy as part of a widescale revamp of agency relations.

Procter & Gamble has confirmed it is to ease its tough conflict

policy as part of a widescale revamp of agency relations.



The move would widen P&G’s choice of agencies, enabling the company to

work with non-aligned agencies and creative hotshops.



It could also give P&G roster agencies greater flexibility in pitching

for new business.



The company, whose range of brands includes Fairy Liquid and Tambrands,

is not expected to abandon its policy of using aligned agencies, but

sources believe it will be more open to awarding business to non-roster

agencies on a project or consultancy basis.



The company’s interest in new media is also expected to loosen the

exclusive grip of P&G’s four main roster agencies, Saatchi & Saatchi,

Grey, DMB&B and Leo Burnett. P&G is known to favour greater

experimentation in online advertising.



A P&G spokeswoman at its Cincinnati headquarters confirmed the change in

policy, which comes amid fears that P&G has been too risk-averse in its

advertising and has allowed its arch-rival, Unilever, to push ahead.



In a statement issued this week by P&G, the company also confirmed

reports that it has begun testing a new agency payment system as part of

a cost-cutting initiative (Campaign, 30 October). The company, which has

traditionally adhered to the full 15 per cent commission rate for

agencies, is understood to be looking at commission rate cuts of between

1 and 1.5 per cent.



Chief executives from seven of P&G’s agencies were summoned to the

company’s headquarters last week to discuss the changes, which may also

include a move to a fee-based remuneration system for some types of

work.



Another reason for changing the payment system is that a

commission-based approach provides an incentive for agencies to favour

television advertising because of the high spend. P&G has said it wants

to find a system that would be ’media neutral’.



In this week’s statement, Dennis Beausejour, P&G’s vice-president,

advertising worldwide, said: ’This is a formal recognition that we want,

and need, full marketing partnerships based on common goals and

perspectives.’



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