P&G pilots 3 new agency models in search for more creativity

Dive Brief:

To cover its fabric care business in North America, Procter & Gamble is creating a standalone agency that combines talent from three top ad holding companies: Publicis Groupe's Saatchi & Saatchi, WPP's Grey and Omnicom's Marina Maher Communications and Hearts & Science, according to The Wall Street Journal. The agency, which is not yet named, will be led by Saatchi & Saatchi New York CEO Andrea Diquez and is expected to begin operating in July.
The new creative agency is one of three models that P&G is piloting. Called "People First," the initiative will draw the top agency people for its fabric brands, including Tide, Downy and Gain, according to Ad Age. Other models include "Fixed and Flow," which will combine an agency-of-record on a retainer for most creative work, with some projects delegated to other shops. Under the third model, P&G is bringing more digital media planning and buying in-house.
The fabric care business accounts for $525 million in U.S. media spending, about 20% of P&G’s $2.7 billion total last year, according to Kantar Media data cited by Ad Age.

Dive Insight:

P&G, the world's largest advertiser, continues to try to shake up marketing, which has been evident in its efforts to demand greater transparency in digital marketing and in previous moves that, like this latest push into new agency models, are designed to cut costs from the marketing process. The company's focus on revamping how marketing is done comes at a time when some of its brands face sluggish sales and investors like Norman Peltz, who now sits on the P&G board following a proxy fight, have called out the company for its lack of innovation in marketing, among other areas.

P&G's Chief Brand Officer Marc Pritchard has accused agencies in the past for operating with an outdated model that dampens creativity In this light, the three new agency models currently being piloted appear to be an attempt to enhance creativity. P&G was inspired to form the new agency models following the success of its Super Bowl campaign, "It's a Tide Ad," which the company produced using creatives from different agencies, according to Ad Age. The campaign, which cleverly hijacked nearly every Super Bowl ad and was one of the most talked-about campaigns from the game, demonstrated how different agencies could work together and get results. With creative from Publicis Groupe and strategy by Hearts & Science, a series of Tide ads amplified the brand's social media engagement, including pre-planned celebrity tweets arranged by independent PR agency Taylor.

The new proposed agency models are also an effort by P&G to cut costs and create more efficiencies in its marketing strategy. The move is in line with the company's previously announced plans to consolidate and upgrade its agency capabilities by reducing the number of agencies it works with by 50%, which would save $400 million. P&G had already cut the number of agencies it uses by 60%, saving $750 million in agency and production costs and improving cash flow by more than $400 million.

The initiatives will also help P&G continue its commitment to higher quality content and more transparency by giving the CPG giant more control over its campaigns and the ability to better measure results and ROI on marketing spend.