P&G rolls out lead agency plan

14 July 2009

CINCINATTI: Procter & Gamble is rolling out its Brand Agency Leader scheme in which it appoints a lead agency on a pre-set fee to commission and control the spending on a particular brand.

BAL was introduced two years ago and now covers about 40% of the company's business. This is set to increase to 70% by the end of the year despite initial reservations from P&G marketing personnel who saw their control over agencies being reduced.

But P&G management claims it has already succeeded in producing more effective marketing management as well as cutting costs by putting the onus on the agencies to deliver to budget.

There remain critics who say, for example, that it is almost inevitable that a lead agency from one holding company will choose to work with 'sibling' agencies, citing the way Grey Global, one of P&G's longstanding agencies, moved communications planning on Pringles from Aegis' Carat to fellow WPP agency MediaCom.

But P&G is determined to rein in marketing costs, in particular by reducing the number of marketing services agencies it uses. These are reckoned to number about 15,000.

The company has also announced that it intends to dramatically reduce the number of production houses who work on P&G campaigns.

Data sourced from AdAge; additional content by WARC staff