Despite our assertion yesterday that clients were more concerned with cost than conflict these days Omnicom, winner of the bulk of Procter & Gamble’s $2.6bn media spend in North America and Canada, says it’s going to create a third media agency alongside OMD and PHD to handle P&G.
In Omnicom Media Group, OMD handles Clorox and Henkel but the real trouble potentially lies with PHD and clients Unilever and SC Johnson, both big rivals of P&G. P&G is currently in the process of shedding brands as well as trying to cut agency costs and its media agency will inevitably be privy to the fine detail of such doings, as will PHD about, for example, Unilever’s plans.
Whether this new agency/arrangement holds is down to Unilever and SC Johnson, but it’s reasonable to assume they won’t be pleased.
Setting up bespoke agencies in whatever sector is fraught with hazards: WPP fell on its nose with Dell agency Enfatico and, more recently, its new Chicago shop Cavalry was ditched by Miller Coors, the client it was set up to handle.
Media is different, of course, but media reviews come thick and fast these days. With the growth of so-called zero-based budgeting (budgets don’t go up and down but start from zero on a continuous basis) it might be said that all media accounts are under permanent review, whether an agency move is planned or not.
So it will be a case of ‘thinking caps on’ at Omnicom. Omnicom’s stock rose sharply yesterday, just as Publicis Groupe’s fell. But there’s a degree of heavy lifting still to come.