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Nestle reassessing ad assignments with its agencies

03-July-2001
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Nestle reassessing ad assignments with its agencies

Swiss food conglomerate Nestle is reassessing ad assignments among its leading roster agencies in what could lead to significant shifts in business in the coming weeks.

Nestle, which markets Alpo and Friskies pet food, Stouffer's frozen foods and Butterfinger candy bars, is a significant spender in the U.S. and abroad. In the U.S. alone, the company spent more than $325 million in measured media last year, according to CMR. Global spending could be nearly double that figure, given the client's large presence outside the U.S., one agency executive said.

The reassessment involves the client's six global roster shops: McCann-Erickson, Publicis, J. Walter Thompson, Lowe Lintas & Partners, Ogilvy & Mather and Dentsu, said Tom Freitag, vp and director of marketing communications at Nestle in Vevey, Switzerland. Each shop works for Nestle in multiple markets.

Sources said Lowe Lintas, which handles business in Europe, Latin America and Asia, was poised to gain an estimated $100 million in new billings. But Freitag stressed that no decisions have been made and said such talk was "premature."

"There is an exercise. It is a theoretical exercise," said Freitag, who confirmed the roster shop evaluation. "There is nothing that has gone beyond the conceptual stage yet." The lengthy process began after Freitag, a former Ogilvy & Mather executive, was installed at Nestle in July 1999.

As part of the process, the six agencies were asked to disclose the brands they handle for other food marketers, including Unilever and Kraft, to avoid conflicts.

Although Nestle did not require creative pitches, the company did ask the shops to assess the marketing strategies of brands they don't handle and explain what they would do differently. Nestle is exploring a host of realignment options, including by geography, food type, even subdivisions within food types (such as dog food vs. cat food).

Although the evaluation centers on global shops, domestic shops such as Dailey & Associates in Los Angeles may benefit through their associations with global shops. Dailey, which handles Nestle chocolate and pet-food brands, is part of The Lowe Group, the umbrella organization of Lowe Lintas.

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