Mondelez taps Aegis for North American media assignment

Global duties split with SMG

CPG giant Mondelēz International has restructured its media assignment, naming Aegis as its media partner for the Asia-Pacific, Europe and North America regions, with Starcom MediaVest Group (SMG) overseeing its Eastern Europe/Middle East/Africa and Latin America businesses.

Aegis will also oversee the company’s global categories. Prior to the review, which kicked off in June, it was responsible for the company’s global chocolate business, while SMG had global responsibility for biscuits, candy and gum.

All of the appointments take effect Jan. 1.

Mondelēz said the decision stems from a “thorough assessment” of its capabilities in key areas including ecommerce, programmatic buying and content monetization. It called the agency appointments the next step in its “transformation journey.”

The company said the centralization of its media operations would drive cost savings of more than 10%. These will be re-invested to further fuel its business growth.

The process also simplifies its agency infrastructure, while allowing it to leverage its scale and build capabilities in the areas of ecommerce and content monetization, the company said.

At the Barclays Global Consumer Staples conference in Boston last month, Mondelēz International executive vice-president and chief growth officer Mark Clouse predicted ecommerce could become one of the fastest-growing platforms within the company, with revenue increasing from less than US$100 million today to as much as US$1 billion by 2020.

The company has identified ecommerce as one of three global consumer trends creating additional growth opportunities, along with an increased emphasis on well-being and shifts in income distribution.

Clouse said the company plans to become a global leader in well-being snacks, with 50% of its portfolio in that space by 2020.

It is also broadening its portfolio to what it described as “aspirant” consumers at one end of the spectrum and affluent consumers on the other. “By doing so, the company is maximizing its category reach and driving incremental consumers to its brands and categories,” the company stated.

At the same conference, EVP and CFO Brian Gladden said the company had implemented “zero-based budgeting” tools to reset spending, identify specific cost reductions and capture sustainable savings.

It is also building a global shared services capability in an effort to simplify and standardize 15- back-office functions over the next two to three years, with each process expected to deliver cost savings up to as much as 50%.

The company said it expected to reduce overheads as a percentage of revenue by at least 250 basis points between 2013 and 2016.

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