Major CPG Review so Call Headquarters
Steve’s breakdown: Durex, Lysol, Mucinex parent company RB launched a U.S. media review so if you’re part of any giant holding company, give headquarters a call to see where your agency fits in.
Also, take a close look at creative for a lot of their brands cause, it’s not great . . .
PARSIPPANY, NJ Reckitt Benckiser (RB) is taking stock of its media agency roster, Campaign US has learned.
The health and wellness company, which looks after household brands like Durex, Lysol and Mucinex, is launching a review for its U.S. consumer media account, according to people with knowledge of the matter.
Many believe a global media review will follow.
RB spent an estimated $315 million on media in the U.S. last year — $60 million of which on digital media, according to COMvergence. Global spend for 2019 was around $2 billion.
Publicis’ Zenith is a major incumbent for global markets. RB has a strong relationship with the Havas network across numerous markets where it also holds global creative AOR status. Dentsu also wrangles a slice of media business.
All major holding companies are eyeing up the review. The search is believed to be run out of London.
Sources painted a picture of a parent company deep in organizational restructure as its moves from legacy siloes to a more collaborative way of working.
Laxman Narasimhan, who joined the company as CEO in September last year, said during the Q4 earnings call that RB is “not as efficient as we should be.”
He explained this was highlighted in RB’s conversion from gross margin to operating margin, which points to opportunities to find savings to invest back in growth, such as innovation and sales.
Narasimhan said: “Our analysis showed that we have opportunities to be significantly more efficient and effective in our brand equity investment, our direct and indirect procurement as well as our end-to-end supply chain costs.
“We are third quartile on brand equity investment efficiency with a higher non-working spend and the need for better allocation of spend. We used to be best-in-class in procurement with very strong practices, but we have opportunities here today, given the leanness of our team in both direct and significantly more in indirect procurement.”
He admitted RB’s end-to-end supply chain is “not as efficient in certain areas or effective.”
The CEO added: “It delivers lower manufacturing cost and quality, a muscle we have built, but it comes at the expense of customer service. We need to improve supply planning, including leapfrogging into new machine learning and AI tools. We can increase the use of process automation. We have a wealth of opportunities to capture these efficiencies and reinvest them in capabilities and the expertise to drive growth.”