P&G Plans to Cut $500 Million in Agency Fees by Shrinking Its Roster
This decision is a result of procurement departments commodifying creative.
The adage that, "You can't manage, what you can't measure," is why "non-media" spend is under attack by a corporate mentality that believes creative is interchangeable, These "accountants" recognize that media can be measured and managed and therefore negotiated for the best procurement value. They do not have a metric or method for valuing creative.
Granted,, there are many excesses and overlaps in the agency world.which could be consolidated for better value, but great creative cannot be strictly measured or valued by procurement departments under the direction of CFO's.
When a company is manged to a bottom line, instead of to a standard for the short term benefit of share holders it is only a mater of time until a smarter, better or cheaper competitor eats their lunch. This is why private label products are so successful today. With no creative and little marketing, private label products are eroding the market share of companies like P&G.
CPG companies must understand that in the 21st Century they are no longer just selling products but are actually marketing machines creating demand.
Today,money should be spent on creative marketing in the same fashion which product development was at one time. When companies think like this, it is no wonder that the position of CMO is valued as it is in the C-Suite, at the board level and ultimately on Wall Street.
Read the article here.
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