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Looks to adopt some aspects of Gillette model, based on fees, incentives
PROCTER & GAMBLE CO. is reviewing its five-year-old agency compensation system in a move that could have a significant bearing on how the world's biggest advertiser wields its $5.9 billion global ad budget.
P&G Global Marketing Officer Jim Stengel said the re-examination was prompted by P&G's $57 billion acquisition of Gillette Co., which operates under a compensation system based on fees and incentives rather than P&G's sales-based model. P&G is operating for now under both systems, with incoming Gillette shops, led by Omnicom Group's BBDO Worldwide, adhering to the Gillette system. P&G is also looking to adopt aspects of Gillette's agency-evaluation process.
P&G's compensation review is in its earliest stages; the committee, to be made up of Gillette, P&G and agency executives, is yet to be named. P&G's Global Strategic Relationship Optimization Manager Kim Kraus is expected to...