Hasta La Creative!

Procter & Gamble Co. plans to cut as much as $500 million from agency fees under a new drive to reduce the number of agencies it works with, Chief Financial Officer Jon Moeller said on the company’s earnings call Thursday.

“One non-media area that offers significant opportunity is agency spending, which includes fees and production fees of agencies we use for advertising, media, public relations, package design and the development of in-store materials,” Mr. Moeller said. “We plan to significantly simplify and reduce the number of agency relationships and the costs associated with the current complexity and inefficiency while upgrading agency capability to improve creative quality and communication effectiveness. We see an opportunity for up to half a billion dollars of of savings in this area along with stronger communication to consumers.”

Though P&G doesn’t disclose its total spending on agency fees, executives close to the company have estimated them at around $1 billion.

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