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P&G opts for category buying approach

News, 09 December 2015

NEW YORK: Procter & Gamble, the FMCG giant, is taking a category-based approach to media-buying, according to a leading executive explaining the decision to switch its US budget from Starcom Mediavest Group to Omnicom Media Group.

"We're tailoring the media capability category by category to meet each business' unique needs," said Mark Pritchard, P&G's global brand officer.

"We're also integrating planning, buying and operations, which really allows us to streamline and improve efficiency," he told Advertising Age.

The move marks the culmination of a review process that began in May and will see US buying for brands, such as Tide washing powder, Head & Shoulders shampoo and Crest toothpaste shift from Publicis-owned SMG to Omnicom Media Group.

Omnicom will be supported by Carat, the Dentsu Aegis business which handles P&G's Canadian business.

The exact division of categories between agencies has yet to be finalised but is expected to be in place before the start of P&G's fiscal year in July.

Earlier this year the business cut the number of agencies it works with by 40% globally, saving $300m in agency and production costs as part of a longer-term strategy to find £500m of savings as it shifts spending into digital, social, video and mobile.

And Pritchard confirmed, in remarks reported by the Financial Times, that efforts continued to "drive out non-working spending and funnel it toward working spending going direct to the consumer".

He explained that "Omnicom and Carat came out with what was a superior and proven performance in data analytics, planning, buying, innovation, talent and, of course, financial value".

"They're going to give us better cost and spending on the services they provide and better value in the media they buy for us," he added.

Starcom Mediavest Group will retain those brands that P&G is in the process of divesting and Pritchard noted that it would still have a "huge amount" of the company's business outside North America.

Data sourced from Advertising Age, Financial Times; additional content by Warc staff