How will one network cope with the dollars 550m account? Caroline
Colgate-Palmolive wants to ‘save money and enhance creative
effectiveness’, which is why, last week, it made history as the first
fmcg giant to appoint a single agency worldwide (Campaign, 8 December).
Young and Rubicam is the recipient of Colgate’s dollars 550 million
budget, depriving a stunned Foote Cone and Belding of an estimated
dollars 200 million. Instead of the commission-plus performance system,
Y&R will be paid on a cost and performance basis that means the network
- and, of course, Colgate -will have to perform well for the agency to
make a profit.
Fernan Montero, Y&R’s European chairman, is unstirred by this, not least
because Y&R has already worked efficiently on this basis for Sears and
AT&T. He says: ‘Payment by results will be beneficial to us. If you have
confidence in what you do, you can be assured of reasonable levels of
As clients like IBM and Bayer seem increasingly willing to hand
international business to single agencies, the questions remain: How
global is global? Will Colgate still rely on individual agencies to meet
the needs of local markets?
Montero explains: ‘Of course we can think with a global opportunity in
mind, but you will not see us going back to one strategy, one creative
Montero feels agency networks are key in the globalisation of brands.
This means more than the slavish following of clients around the world
in the traditional sense.
The Y&R appointment will see the network producing ads in Colgate’s
three core product areas - bodycare, fabric care and household surface
care - for 50 countries. But will it make for good advertising?
Montero cites the success of the current Y&R creative structure for
Colgate, which is based around ‘centres of creative excellence’ with
most European work developed in Milan.
Meanwhile at Y&R New York, six people are ‘looking for opportunities to
take strong local ideas around the world’. One example of this was Y&R
London’s 1986 award-winning ‘wall’ commercial, which showed a demolition
ball smashing against a giant set of teeth to remove tartar.
Some observers query whether any agency can handle so many brands for
one company. But there are precedents; the much larger Procter and
Gamble uses nine agencies in the US - but splits the lion’s share of its
dollars 2 billion global spend between Grey, D’Arcy Masius Benton and
Bowles, Saatchi and Saatchi and Leo Burnett.
This article was first published on Campaign