One of the world's biggest advertising spenders is reducing its ad budgets and cutting the number of agencies it works with by 50 percent, and plans to bring more media planning and buying in-house.

Procter & Gamble's Chief Financial Officer Jon Moeller said the company had already reduced ad agency and production costs by $750 million and expected to save another $400 million "in the next phase."

Speaking on the company's second-quarter earnings call Tuesday, Moeller added that P&G currently works with 2,500 agencies and plans to reduce this to 1,250.

"We need the contribution of creative talent and are prepared to pay for that. We don't need some of the other components of the cost. We will move to more 'fixed and flow' arrangements with more open sourcing of creative talent and production capability, driving greater local relevance, speed, and quality at lower costs," he stated.