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
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