Advertising agencies under the gun from major contract reviews

Procter & Gamble Hygiene and Health Care

23/06/2015 15:00

* $27 billion in media buying contracts up for grabs 
    * Brands like Unilever, Volkswagen demand cheaper fees 
    * Tech changes role of ad agencies, threatens margins 
    * Trust between big companies, agencies at an ebb 
 
    By Leila Abboud and Jennifer Saba 
    CANNES/NEW YORK, June 23 (Reuters) - An unprecedented number 
of blue-chip companies have put their advertising contracts up 
for review this year, underlining the growing pressure on ad 
agencies as online marketing threatens their traditional role 
and profit margins. 
    At the industry's biggest annual conference in Cannes this 
week the main topic of conversation among the 13,000 delegates 
is the 18 companies - from consumer products giants Proctor & 
Gamble  PROC.NS  and Unilever  ULVR.L  to automakers like BMW 
 BMWG.DE  and Volkswagen  VOWG_p.DE  - that have decided to 
re-think which agencies they want for marketing advice. 
    About $27 billion in media planning and buying contracts 
across television, radio, print, text and online are up for 
grabs, according to Ad Age, more than in the past three years 
combined.  
    The reviews are an unnerving prospect for top agencies WPP 
 WPP.L , Omnicom  OMC.N , and Publicis 
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