P&G cuts agencies by 40% in efficiency drive

04/08/2015

Procter & Gamble is reducing the number of agencies it works with globally in PR, advertising and marketing, as the FMCG giant looks to improve spending efficiency across the business.

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P&G is shifting more of its ad budget to digital media where consumers are spending more of their time.

Speaking to PR Week, a spokesperson said: "We see a significant opportunity in agency spending, which includes fees and production costs for agencies we use for advertising, media, public relations, package design and development of in-store materials.

"We are significantly simplifying and reducing the number of our agency relationships and the costs associated with the current complexity and inefficiency, while upgrading agency capability to improve creative quality and communication effectiveness."

By cutting the number of agencies by 40 per cent, P&G expects to save around $300m (£192m) on agency and production costs in 2015 compared with the previous year.

Last month P&G sold off 43 of its hair and beauty brands, including Wella and Max Factor, to beauty giant Coty for $12.5bn (£8.13bn). The deal was part of a brand cull that began last year when P&G started axing its 100 least profitable brands.

Meanwhile David Taylor is preparing to succeed AG Lafley as chief executive of the business.
P&G works with several agencies including MSL Group, Hill+Knowlton Strategies, Ketchum and Talk PR. It is not known whether the agencies will be affected by the changes.

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