Dive Brief:
- Procter & Gamble (P&G) has introduced a new media model as it continues to shift more of its marketing work in-house, Adweek reported. The change-up is directed at giving brands greater control and flexibility in how they manage their growth, per Adweek, including by letting them decide how to best conduct their own media planning, digital buying and investments in programmatic.
- As part of the change, the packaged goods giant held a round of internal bids for some parts of its media business rather than running a traditional formal review. Included in the process were incumbent shops Hearts & Science and Carat, along with P&G's in-house team, which bid on seven categories across P&G's North American business, including fabric care, oral care, feminine care, personal health care, home care, skincare and baby care.
- P&G doesn't comment on agency assignments, but sources told Adweek that Dentsu's Carat will control media buying and billing for a bigger share of the company's business, while Hearts & Science lost out and will no longer handle categories and brands that it has worked with since 2015. P&G's in-house team reportedly won bids for media buying for its oral care lines.
Dive Insight:
P&G is trimming the number of agencies it works with to cut costs and improve efficiency, and plans to reduce its agency roster by 50% to save $400 million over the next few yeas. However, Dentsu reportedly winning big after the latest run of internal bidding, including against an in-house agency team, shows that third-party partners still have a significant role to fill in the packaged good giant's business.
Still, P&G is clearly in the midst of rethinking its approach to advertising as consumer habits shift and it faces continued pressure from activist investor Nelson Peltz, per Adweek. At CES, Chief Brand Officer Marc Pritchard said "that the days of advertising as we know it today are numbered" and suggested the marketer would focus more on product innovation and purpose-led creative as it looks toward the future.
P&G has recently tweaked its approach to agencies in other ways as well. Last spring, it launched a standalone agency for its fabric care business that combined talent from rival holding groups, including Publicis's Saatchi & Saatchi, WPP's Grey and Omnicom's Marina Maher Communications and Hearts & Science. The group was one of three agency pilots the company is running to recenter its marketing work on creativity.
Reworking its marketing business appears to have helped to bolster P&G's bottom line in recent quarters. The company announced during its fiscal Q4 earnings report that it used third-party data to reduce ad frequency by 10% and reinvested the savings to boost media reach. Working media reach for the quarter increased 4% year-over-year, the company said.
