We noted yesterday the incidence of creative account reviews, their increased expense and that many of them didn’t actually seem to lead to much advertising.
We’ll they’re at it again: Center Parcs is reviewing its business out of Brothers and Sisters (B&S is repitching) following its purchase 18 months ago by Canadian oufit Brookfield Asset Management (many PE companies are required to review all big contracts every three years by their investors) while Max Factor, which used to be synonymous with a certain type of Mad Men advertising (below), is reviewing its global business at Leo Burnett after 20 years. Max Factor was one of 43 “speciality beauty” brands Procter & Gamble recently sold to Bart Becht’s go-go Coty empire.
Private equity owners are one reason why brand-building as we used to know is becoming a lost art. Their aim is to buy a company (usually from another PE outfit), spruce it up a bit (usually by cutting costs including marketing and advertising), leaving someone else (another PE company most likely) to pick up the pieces. It’s billion dollar pass the parcel.
In the case of Coty chairman Becht (formerly CEO of Reckitt-Benckiser) reckons he can save $750m costs annually, much of this will be marketing costs although sourcing etc will also be a big number. If he’s right it doesn’t say much for P&G’s stewardship of the brands but, in his time at RB, Becht made a fortune for both himself and the company by being faster on his feet than household rivals P&G and Unilever.
Big companies are always trying to slash agency fees and the like (P&G is trying to save $500m year on these) presumably at some cost to the quality of work. But their marketing budgets still balloon as they pour billions into social media and the like in the attempt to be part of a possibly elusive global “conversation.” Interestingly one of the first moves by the new-style Coty was to buy digital media specialist Beamly, possessor of its own platform it seems, to try to get a grip on this.
Some agency stands to win big from Coty although the cost screw will be on. The company appointed Anomaly, which was recently voted Ad Age’s Agency of the Year, to handle its Sally Hansen brand globally. That may be a clue.