OMD Digital has knocked back the opportunity to work with Procter & Gamble after winning part of the FMCG giant’s digital media business.
P&G launched a review of its digital media strategy in June, with the business subsequently being split between Starcom IP and OMD Digital.
However, OMD has taken the unusual step of declining to work with P&G. In a statement it said: “P&G recently reviewed its digital media arrangements and invited OMD Digital to take part in the process. The quality of our proposal led them to take the 10 most digitally [active] brands in their portfolio from the incumbent Starcom and ask us to manage them. However, we couldn’t agree on the financial terms of this potential collaboration and therefore OMD Digital has decided to decline the opportunity to work with P&G.”
The decision means that Starcom will now be handling all of P&G’s digital media account for brands such as Olay, Max Factor, Pantene, Pampers and Head & Shoulders.
Rayan Karaky, general manager of digital operations at Publicis Groupe Media, under which Starcom IP falls, said: “P&G had awarded us the majority of the business and now they have decided to consolidate all the business with us. P&G has a rigorous pitch process and they always partner with the best agency.”
OMD, Starcom, Mediacom and Technowireless were initially invited to pitch for the business, which involved taking responsibility for P&G’s digital media account for the Arabian Peninsula. It was the first time that P&G had sought an agency purely dedicated to digital media planning and buying.
P&G, whose regional HQ is in Jebel Ali, confirmed that the business would now be handled solely by Starcom but declined to comment any further.
Campaign Magazine Middle East 
[…] OMD snubs P&G in row over price […]
Now more than ever the entire local advertising industry (not just the agencies) need a backbone. http://bloganubis.com/2009/05/22/backbone/
Good on ya OMD. It takes courage to stand up to unrealistic pressure from clients. Hope your stand will be taken up by other agencies not to buckle in to financial cutting by clients.
Hats-off to OMD, no matter what is the real story is, they came out as winners. Biggest advertiser on the planet became a laughing stock when awarding the part of the business to the agency who doesn’t handle them anywhere on the planet. And while starcom should be happy with this, it may be a good wake up call.
There’s something not quite right about all this. Why did P&G hand a significant part of its business to an agency before working out whether they’d actually work for them? Seems a bit daft to me. Or is P&G so out of kilter that it doesn’t know what time of day it is? OMD must’ve issued the statement for a reason other to say they’re not playing ball. But I guess we’ll never really know the full story.
As OMD already manage J&J (Neutrogena) and Beiersdorf (NIVEA), wouldn’t they have had a huge conflict of interest? Perhaps OMD were looking after their current stable of clients or at least had push back from them.
My take is that P&G had a golden opportunity to show the market that they were serious about digital and willing to shake up existing relationships in order to pioneer in this space. Deciding to split the business doesnt sound like the tough decisions were made and clearly they instead focused on cost cutting and kicking their existing agency up the backside.
Or how about P&G smelt the fishy books of OMD and compared AVR levels to what OMD claimed? did that occur to anyone before giving them a pat on the back… no agency is in the position to say no to P&G, not after the loss of Mobily, Nissan and few others.. wake up people.
We can smell the fishy post of Truthbetold …
P&G always wants the best for less, always squeezing on costs. While negotiating with an agency they play on the excuse that the agency will benefit from certain fixed amount of business and the agency can feel “privileged’ having P&G account in its profile of clients. Which will help get more business outside.
Well they should know that other clients don’t care if you have P&G account or not, others pay more and expect good work in return. So well done OMD!!