Dive Brief:
- As reviewageddon winds down, one of the larger deals has been settled with P&G making Omnicom Media Group its North American lead to oversee P&G’s $2 billion annual media spend.
- P&G initiated its agency review in May in an effort to reduce the total number of firms it works with.
- Omnicom will be joined by Dentsu Aegis’ Carat, expected to handle about a third of the business, and Starcom Mediavest Group, which will retain its business with a number of P&G brands the global conglomerate is expected to sell off in the near future.
Dive Insight:
Omnicom Media Group grabbed one of the biggest ad contracts of this year’s reviewageddon after landing P&G’s $2 billion in annual media spending.
P&G said in a statement, "This change will help us reach more consumers with better precision and greater efficiency to grow and create value. Both Omnicom Media Group and Carat demonstrated superior and proven performance in data, analytics, planning, buying, talent and overall financial value. We are integrating planning and buying, and operating across North America markets to streamline operations and increase efficiency. And we will tailor media capability category by category to meet their unique business needs to more effectively reach consumers for their brands."
Omnicom is expected to launch a new media network to handle the account. SMG remains P&G main agency outside of the North American market, and Dentsu Aegis’ Carat also added more P&G business to its portfolio.
Even though P&G spends a large amount in media, the number has dropped from $3.47 billion in 2013 to $2.66 billion last year and dropping again this year to $2 billion. The consumer products company cut the number of agencies it works with by around 40%, and slashed spending on agency and production by $300 million over the last fiscal year. According to its CFO, the savings were described as “non-working savings” that will go toward investing in working media and sampling dollars.
"We will see cost savings by simplifying our agency structure and negotiating new rates for the services our brands need today, and continue to reinvest to drive brand growth," the consumer products giant said in the same statement about the Omnicom and Carat ad contracts.