P&G shakes up Chinese media strategy

03 July 2009

GUANGZHOU: Procter & Gamble, the world's largest consumer goods company, is shaking up its Chinese media buying function by moving responsibility for all price negotiations in-house by September.

P&G will go direct to media owners to agree pricing, before passing actual buying duties on to Starcom Guangzhou, its lead media agency in China. But in addition to negotiations, the shop is also to lose non-TV buying duties, which is moving to an unnamed agency rumoured to be MediaCom.

Starcom will still manage TV scheduling and communications planning for P&G, but the wider change may bring about the closure of its Guangzhou-based dedicated buying unit for non-TV media.

P&G's own internal purchasing department is now likely to be handling media price negotiations. The advertiser's belief that it can achieve greater cost-efficiencies going it alone, rather than relying on bulk-buying from agencies, is thought to be behind the decision.
However, an unnamed source suggested it was more than a coincidence that the announcement came not long after the departure of J Alfonso 'Pon' De Dios, P&G's associate director of media for Greater China for the last 14 years. "With Pon leaving," said the source, "much of its China media experience has left China."

Commenting on the news, Starcom's CEO for North Asia, Paul Maher, said: "Starcom Mediavest is proud of the work and partnership we bring, and will continue to bring, to P&G. It is and will continue to be a critical partner for P&G."

Whether the changes impact upon P&G's other main media agency partner in the region, MediaCom, remains unclear. In addition to The agency picked up planning duties for the Olay, Faceguard and Camay brands in a pitchless transfer from Starcom last year.

Data sourced from Media; additional content by WARC staff