Arun Sudhaman 11 Jan 2016 // 5:30PM GMT
CINCINNATI — P&G has concluded its extensive global PR agency review, consolidating PR support for all of its brands with five global agency groups: MMK+ (Omnicom), MSLGroup (Publicis), Citizen Relations (Blue Focus), DeVries Global (Interpublic) and H+K Strategies (WPP).
The realignment, part of the FMCG giant's overall effort to simplify operations and slash agency costs, affects brands across all of P&G's major product categories: beauty; fabric and home care; baby, family and feminine care; and health and grooming.
The lengthy PR reviews took place last year, as revealed by the Holmes Report, affecting numerous PR firms that P&G works with. Agency heads, who have been anticipating a conclusion for weeks now, were formally notified of P&G's decisions last night, before further details were provided this morning.
P&G chief brand officer Marc Pritchard (pictured) declined to provide specifics as to which agencies would handle which categories and brands, but told the Holmes Report that the roster would cover the "vast majority of our brands and markets."
As expected, the consolidation represents a clear move towards the holding group agency model, although decisions are still pending regarding some of P&G's local market partners, of which the company counts numerous relationships across the globe.
In many countries, key brands have been handled by independent, domestic PR firms, such as India's Madison PR, China's @PR and the UK's Talk PR, and Pritchard noted that the company will "continue to use a small, select group of independent local agencies for expertise and capability where needed," focusing on such regions as Asia, Southern Europe, India, the Middle East and Africa.
Otherwise, the bulk of P&G's local independent partners are expected to lose out from the consolidation. The new roster sees P&G reorganize rather than radically redraw its existing global PR support, with all five of the new roster agencies already counting significant relationships with the consumer products company. Pritchard said that some accounts are changing hands, with agency sources adding that, in certain cases, brand migrations between agencies have been underway for some time.
Pritchard would not, though, comment on which agencies have prospered via the new roster, noting that the specific breakdown of brands and categories is still being worked through across P&G's various geographic markets.
"The most important aspect of this is that P&G is raising the bar on our brand building so we can drive growth and value creation," said Pritchard. "That requires the best partners, so what we’ve been doing is going through our agency partner lineup and identifying who we view as the best, so we can both upgrade and both consolidate."
The five chosen agencies, said Pritchard, "have breadth across the world, which is something that is very important for us."
"It was important that we chose partners to work with that have capability in the markets in which we compete," he added. "This enables us to not only simplify the lineup but also integrate more effectively around the world."
Omnicom's MMK+, for example, has been in place for several months and had already consolidated global business, including fabric care. The unit is led by Marina Maher Communications (MMC), a key P&G PR agency partner on several beauty and hair care brands, and also features sibling firms Ketchum, FleishmanHillard and Porter Novelli, each of which already works with P&G in various markets around the world.
MSLGroup, meanwhile, has seen considerable success from its iconic #LikeAGirl campaign for feminine care brand Always and previously held business across other divisions, including health and home care. Citizen Relations, meanwhile, has produced award-winning efforts for Old Spice, and also worked on Pampers and several other brands.
H+K Strategies has worked on men's grooming brands and Olympic sponsorship projects, while Interpublic's DeVries Grobal has handled beauty, haircare and home care brands in the past.
The reviews came after P&G previously announced plans to cut as much as $500m from the $1bn that it spends on agencies across traditional advertising, digital, media and PR.
"As a result of the consolidation, we’ll certainly see some efficiencies," confirmed Pritchard. "The spending is less important than the impact. Our objective is to increase the impact and effectiveness of what we achieve. When you have fewer, more focused, stronger agencies, you get a lot better."
Pritchard noted that PR and influencer advocacy is "integral" to P&G's brand building efforts, particularly given the impact of digital technology. "In fact, it makes the PR world arguably more important because there’s so much fragmentation of messaging, what consumers will tend to listen to are opinion leaders that they respect."
The company is also selling 43 brands to Coty, including Clairol, Covergirl and Max Factor, along with professional hair care and fine fragrance brands. P&G's remaining beauty business is anchored by big sellers such as Pantene, Head & Shoulders, Herbal Essences, Olay and SKII. The grooming side, meanwhile, covers Gillette and Braun.
P&G's efforts to transform its business include offloading less profitable brands and cutting headcount, amid disappointing recent results. Including the Coty sale, the company plans to divest 100 brands to focus on faster-growing products. It is also cutting costs aggressively, but has struggled to grow revenue and maintain market share.