Procter & Gamble Co.’s $55 billion acquisition of The Gillette Co. makes the world’s biggest marketer that much bigger. The company will add Gillette’s $1 billion of ad spending to its already-huge $5.5 billion coffers.
While mergers are usually bad news for media outlets that should not be the case if the deal is approved because there is little brand overlap.
There are, however, implications for a swath of ad agencies.
Gillette’s media buys rely heavily on high-end sports and male-oriented programming viewed by consumers that favor its shaving products and brands. P&G, however, is a packaged-goods marketing organization known as an advertising penny pincher and for its media planning efficiency.
Even without the Gillette acquisition P&G is undergoing a marketing transformation in an effort to find better ways to reach consumers. With traditional plans based around 30-second TV spots losing effectiveness, P&G is pushing its media agencies to adopt a sophisticated consumer-centric approach to “communications planning” that engage customers in new ways.
The deal also has huge ramifications on the ad agencies, with the likely beneficiaries being P&G shops. They include Publicis Group, WPP Group, and Grey Global with Publicis’ Starcom MediaVest Group and Carat Interactive (the two share P&G communications planning) most likely to assume media buying for Gillette. The big loser? Omnicom Group whose agencies have handled Gillette’s business for decades.