BAL Pg

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BAL Pg

  1. 1. P&G’s BAL Model Rich DelCore Finance Director – Global Marketing4A’s Tips, Tools & Tactics Webinar – 6/24/09 For Audio Program, Call: (916) 233-3088 Access code: 138-713-397
  2. 2. 2Procter & Gamble SpeakersRich DelCore Cindy Deihl Jane WagnerP&G Finance P&G BBSS S&S – BAL - IAMS
  3. 3. 3Good AfternoonTo get started:• I would like to understand the audienceand interact as we go along•When you see this picture –it will require an audience response
  4. 4. 4QuestionDo you work for an agency employed by: (Select only one)a. P&Gb. Other consumer packaged goods co.c. Otherd. Don’t work for an agency
  5. 5. 5QuestionDo you know what BAL stands for? (Select only one)a. Yesb. Noc. Yes, I work on a BAL Team
  6. 6. P&G’s BAL ModelCreating an Integrated Agency Team
  7. 7. 7Procter & Gamble
  8. 8. 8BillionDollarBrands HouseholdBeauty & Care Health &Grooming Well-Being
  9. 9. 9$500M to$1 Billion
  10. 10. 10Pringles has over 2.6 million friends
  11. 11. 11What’s the next big idea?
  12. 12. 12It began 3 years ago…
  13. 13. 13 Partnership Finance, Purchases, Marketing and our Agencies Common vision continually improveholistic brand building
  14. 14. 14The Case for Change Barriers to holistic communications Inconsistent approach Little master planning done across agencies Each silo undertakes own plan Non‐advertising agencies rarely involved in  concept development Advertising compensation model (ANR)  restricts flow of spend to other agencies
  15. 15. 15QuestionHow many agencies do you think P&Gworks with (all types)? (Select only one)a. 500b. 1,500c. 2,500d. 3,500
  16. 16. 16The Case for Change System hard to manage Absence of Master Planning – Frequent “add ons” – Poor global coordination Too many “one‐off” relationships  – 2500+ agencies, 3000 Pay Points                   – Thousands of fee contracts High touch model                                           – Different P&G person for every agency
  17. 17. 17The Case for Change Operational inefficiencies  Decentralized agency sourcing minimizes  P&G ability to drive scale Agency duplication – Account planning/mgmt and creative – Overlapping capabilities Several organizations manage comp  resulting in multiple approaches and  systems
  18. 18. 18QuestionHow much do you think P&G spendseach year in agency fees? (Select only one)a. $ 100,000,000b. $ 250,000,000c. $1,000,000,000d. $2,000,000,000
  19. 19. 19The Case for ChangeNeed to improve spending efficiencies Spending a lot – $1B in agency fees Turn non‐working dollars into  working dollars (maximize ROI) Build long term value add  relationships with Agency partners
  20. 20. 20The Evolution of ThinkingExternal Survey IndustryLPK ANACarat Industry Survey AAAAWieden + KennedyArnold Feb ’08 WFAPublicis Groupe Ron BakerIDEO Tim WilliamsAnomalyOmnicomACMEDraft SummitsQuigley-Simpson Aug ’07, Sept ‘07WPP
  21. 21. 21Exploring Options (16:3:1) Agency Value  Rate Based Brand Agency  Contribution Leader ?
  22. 22. 22Model Parameters 1 Degree of Unification 2 Structure of Relationship 3 Selection 4 Degree of Flexibility 5 Evaluation
  23. 23. 23Examples 1 Degree of Unification BudgetSINGLE MULTIPLE
  24. 24. 24Examples 2 Structure of Relationship CASH + Payment Form ONLYOPTIONS CASH Basis for COST/ Compensation VALUEMARGIN SHORT Terms of Relationship LONG TERM TERM 24
  25. 25. 25Examples 3 Degree of Flexibility How Fast To Shift FundsSLOWLY QUICKLY Flexibility On Metric Selection COST/ VALUEMARGIN
  26. 26. 26Brand Agency Leader Model
  27. 27. 27Strategy and Execution before BAL ER Agency ER Mgr Interactive Agency Digital Mgr P&G BRAND ADD ADVERTISING Media AGENCY Design FMOT Mgr Global Strategic Mgr Comm Planning FMOT Agency Design Agency Multiple competing messages
  28. 28. 28
  29. 29. 29Global Strategic Strategy after BALComm Planning PR AgencyInteractive Agency BAL FMOT AgencyAdvertising Agency • Master Plan Design • Brief for each initiative Agency (on Master Plan)
  30. 30. 30The Benefit of OneBAL simplifies and enables more holistic brand building. Brand One check P&G Agency Decision Leader One brief Maker One cohesive message
  31. 31. P&G’s BAL Model Cindy Deihl BBSS
  32. 32. 32QuestionWhat does BBSS stand for? (Select one)a. Buy Big Strategic Stuffb. Brand Building Strategic Sourcingc. Big Bad Sourcing Staff
  33. 33. 33Who is the BAL?Brand Agency Leader• A person and an agency• Leads an integrated agency teamResponsibilities• Manages the work of each member agency• Is accountable for team performance• Agrees on a single global fee• Owns partner agencies compensation
  34. 34. 34 Key Aspects of the BAL Model Brand Agency Leader P&G Decision Maker• BAL coordinates all agency • Approves BAL agency, partner efforts partners and final creative• Bigger “seat at the table” • Commits long-term to for all agencies keep top talent• Greater flexibility to shift • Rewards all agencies on spending brand revenue• Compensation varies with • No annual negotiations sales, shares and evaluation
  35. 35. 35Value-Based Compensation• +/‐ 10% range• Can increase or decrease based on  P&G and Agency performance• Driven by 3 factors ‐ Sales  50% ‐ Share 25% ‐ Evaluation 25%
  36. 36. 36How will this impact the Agencies? BAL creates new career opportunities withinthe Agency community. BAL enables our brands to more fullyleverage the core capabilities of ALL agencypartners. BAL enables Agencies to think differentlyabout how to resource a business.
  37. 37. 37 • Holistic communicationBenefits • Reduced time and touches • More efficient spending • Value based compensation
  38. 38. 38Some results
  39. 39. 39Some results Sales Volume Share
  40. 40. 40Testimonials
  41. 41. 41Testimonials
  42. 42. 42Testimonials
  43. 43. Panel Discussion
  44. 44. 44Procter & Gamble SpeakersRich DelCore Cindy Deihl Jane WagnerP&G Finance P&G BBSS S&S – BAL - IAMS
  45. 45. Panel Rich DelCore – P&G Finance Cindy Deihl – P&G BBSSJane Wagner – S&S – BAL - IAMS

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