Reckitt Benckiser to sever ties with McCann-Erickson India

In line with a global realignment, Reckitt Benckiser is set to split the Rs 50-60 crore advertising account of its brands in India between Euro RSCG and HTA. The account will move from McCann-Erickson, Delhi.

This development comes on the heels of the global announcement made yesterday that Reckitt Benckiser has decided to split creative duties on its $430 million global account between Euro RSCG (part of the Havas Group) and J Walter Thompson (part of the WPP Group Plc) after a four-month review. The two networks bested Ogilvy & Mather in the final round.

To put things in perspective, McCann-Erickson was forced to resign the business in November 2001 because of a conflict with SC Johnson at sister shop Foote, Cone & Belding in Chicago. While Reckitt Benckiser's global agreement with McCann-Erickson will terminate in June 2002, it is not known when the new agencies in India will assume their responsibilities.

Reckitt Benckiser conducted the pitch on a global basis. While the Euro RSCG pitch team represented shops from the UK, France, Germany, the US, Brazil, Australia and India (represented by Suman Srivastva, strategic planning director, Euro RSCG, Mumbai), Michael Maedel, president and CEO of JWT for Europe, the Middle East and Africa, led JWT's multi-office effort. Post realignment, the two agencies will together handle creative work for five core categories in all the countries worldwide. These include surface care, health and personal care, fabric care, dishwashing and homecare.

Worldwide, Euro RSCG will handle the advertising business for fabric care, dishwashing and home-care products. The major global brands in this category include Vanish, Resolve, Calgon, Woolite, Finish Electrasol, Jet Dry, Airwick, Calgonit and Mortein. In its turn, JWT will be the custodian of the surface care and the health and personal care categories. The big brands here are Lysol (Lyzol in India), Harpic, Dettol, Veet, Lemsip and Gaviscon. While a number of these brands are not present in India, it seems, the Indian agencies have not been notified about the individual brands they would be servicing in the respective categories allocated.

In fact, enquiries by agencyfaqs! revealed that Reckitt Benckiser has not officially informed HTA about its appointment. HTA, it seems, received a confirmation from Peter A Schweitzer, president & CEO, J Walter Thompson, when he sent a note yesterday congratulating the India team. In that note he said, "We will handle approximately 50 per cent of their (Reckitt Benckiser's) total $430 million ad budget, according to the trade press." Both HTA and Euro RSCG India, however, refused to comment on the size of their businesses as the exact portfolio distribution remained unknown.

No doubt this is great news for both the agencies. Excited about the huge gain, Jishnu Sen, associate vice-president and client services director, HTA, told agencyfaqs!, "This is one of the biggest pitches in Delhi in the last couple of years. This win stands testimony to our ability to build huge brands based on superior strategic insight and incredibly persuasive creative."

Interestingly, Euro RSCG India has already got an official confirmation about its appointment from Reckitt Benckiser. The news is certainly of some consolation for the agency, which saw the Rs 50-crore Philips account slip out of its hands last year - again due a global realignment. Whatever be the size, the new business will definitely give Euro RSCG a much needed shot in the arm after it saw a huge chunck of its business turn bad as IT-led accounts went cold last year.

While HTA and Euro RSCG are basking in the glory of the win, McCann-Erickson is left nursing a big wound. The agency's association with Reckitt Benckiser goes back more than five years, when it joined the Reckitt & Colman roster with two other agencies in 1997. After Reckitt & Colman became Reckitt Benckiser in 1999, the new management decided to consolidate the entire business (which was splintered among the three agencies) with McCann-Erickson. Till the current realignment was announced, McCann-Erickson in India was handling all Reckitt Benckiser brands, except Vanish, which was with FCB-Ulka Advertising. In all likelihood, Vanish will move to Euro RSCG, since it has got the mandate for the entire fabric care category.

Interestingly, in its note to Euro RSCG, Reckitt Benckiser has mentioned "Current media planning and buying arrangements (except those with McCann) are unaffected by this." However, a senior official at Universal McCann told agencyfaqs! that the Reckitt Benckiser AOR account "remains undisturbed" as it was won on the back of an "independent pitch" - implying perhaps that the AOR account didn't come its way as part of the global alignment five years ago. As such, the agency is hopeful of retaining the AOR account.

Hopefully, things will be clearer in the coming weeks. © 2002 agencyfaqs!