CINCINNATI: Procter & Gamble is narrowing its roster of nine brand-focused agencies to five in a comprehensive restructuring plan, intended to help the consumer products giant establish a more collaborative environment between the company and its agencies, as well as among the agencies themselves.
The restructuring, which will take effect in July, will leave the company with DeVries Public Relations, MS&L, Porter Novelli, Paine PR, and Marina Maher Communications as its five brand-specific agencies.
"The main reason for this is [that] influencer marketing, which is the term we use collectively to describe the proactive work we do on behalf of our brands, is becoming a more and more important area of marketing for us," said Laurie Steuri, associate director of corporate external relations for P&G. "What we're trying to do is equip our agencies to be able to step up and do even more for us and work in an even more collaborative way."
Steuri stressed that the restructuring had nothing to do with the quality of service P&G had received from its agencies previously.
"This is not about cutting agencies based on performance," she said. "This has been a very difficult process for us."
The company did not consider any outside agencies for the five brand-focused spots. The consolidation will not shrink P&G's PR budget, Steuri added.
P&G, which boasts one of the world's largest marketing budgets, was working with 22 agencies in North America alone. Nine of those had been handling brand PR work, a group now cut to five.
"The other 13 agencies are either working on our Canadian business, or they're doing specialty roles for us that might cut across multiple brands," Steuri explained. "And we have not yet made any changes in those, but we are, of course, looking at those for the same reasons."
She added that the company does not have an ultimate target number of agencies it intends to employ.
When contacted, all five of the agencies declined to comment on what, if any, changes in their responsibilities the restructuring would bring about and referred questions back to Steuri.
She declined to give a specific breakdown of brand assignments among the agencies, but did say, "We have $21 billion [in] brands in the US, and only three of those brands had a change as part of this process... we wanted to re-duce the complexity [and] build our relationships with the agencies, but we didn't want to do a major shuffle."
The three brand changes that were made, she said, were "very deliberate changes and very carefully considered."
P&G made the agency decisions based on its past experience with the firms.
"We have done competitive pitches among these agencies in the past, and, honestly, it doesn't really serve us or them, because... our knowledge of what their capabilities are is based on real-life experience," Steuri explained. "The four agencies that didn't end up on the final roster all had smaller assignments with P&G, and that made it a little bit easier than taking an agency that had a lot of our business and trying to redistribute that."
P&G spent 18 months on the consolidation process, she said. The affected agencies were alerted last month in order to give them time to prepare for the changes that will take effect in July. The brands involved in the work were consulted during the selection process.
Steuri characterized the brand PR work as the sector that P&G spends most of its PR budget on. But the restructuring will not cut budgets. Instead, it aims to make the entire brand marketing process more manageable.
"It was not about cost savings," said Steuri. "It's really to set ourselves up for more work in the future and to play a bigger role in the marketing programs, which has been a trend with us."
P&G only works with a handful of advertising agencies, Steuri noted, which means that "the number of agencies we're working with on a PR basis is really out of whack."
Additional reporting by Erica Iacono and Keith O'Brien.