Nestle picks WPP OpenMind as sole media agency in Europe

FILE PHOTO: Kit Kat chocolate covered wafer bars manufactured by Nestle are seen in London

By Richa Naidu

LONDON (Reuters) -Nestle has picked WPP OpenMind to be its sole media agency in Europe, the world's biggest packaged food maker said on Tuesday, as it seeks to target consumers more efficiently in a cost of living crisis that is changing shopping habits.

The deal is a major win for WPP OpenMind at a time when global ad spending is falling. WPP, the world's top advertising group, in August downgraded its full-year growth forecast due to lower spending by technology companies.

"The result (of the contract) will be better decision-making and media planning to allow campaigns to build brands and win consumer attention at scale," a Nestle spokesperson said in a statement.

Nestle declined to comment on how much it spends on advertising and marketing in Europe, or on details of the deal, such as its length. The Swiss company previously employed a number of media agencies across Europe.

WPP OpenMind will coordinate Nestle's marketing communications - including buying advertising space and planning campaigns - for its hundreds of brands in Europe including Kit Kat chocolate bars and Nescafe coffee.

The agency will not, however, be in charge of creative work such as animation, making jingles and other content generation.

Nestle said Tuesday's announcement was for Europe only, and had no bearing on other regions.

Like many of its rivals, Nestle's spending on marketing was muted last year largely because of supply chain problems and uncertainty over consumer behaviour, but has returned this year.

Top brands are battling to hold onto customers as some cut spending or switch to cheaper alternatives amid rising prices.

CEO Mark Schneider said in July that Nestle's second-quarter marketing spend was "significantly above last year's level" and it would "continue to invest in a very robust manner in the second half of 2023".

In the first half of 2023, Nestle's advertising and marketing spend increased by 7.5% in constant currency versus the same period of the prior year.

(Reporting by Richa NaiduEditing by Catherine Evans and Mark Potter)