Dive Brief:

• During a year of marketing transition for P&G, activist investor Nelson Peltz — who is seeking a board seat at the upcoming Oct. 10 annual meeting — outlines his vision for the future of the CPG giant in a new 94-page white paper from his hedge fund Trian Partners. Suggestions include hiring more third-party digital talent and a reprioritizing of its efforts toward smaller and faster growing brands, per a report in Ad Age.
• The white paper says P&G isn't keeping up with the competition in digital marketing, pointing to how brands like Always don't have as many Instagram followers compared to Kimberly-Clark's Kotex. Cuts last quarter in overall marketing spend as well as in digital were a bad move and the money should have been reinvested in brand building, per the paper. 
• The vision for the future of P&G outlines a reorganization into three global business units, down from the current 10, linked by a holding company. The white paper also hinted at more staff reductions than P&G’s current $10 billion cost-cutting program.

Dive Insight:

While inside battles at multi-national companies are tough to parse, Peltz’s case for radical change across P&G’s entire business strategy reflects an important question facing big brands this year — is it time to take a stand on the lack of transparency in the digital media supply, as P&G's Chief Brand Officer Marc Pritchard has argued, or should marketers continue to invest in digital even if the return-on-investment isn't clear? 

The white paper comes at a time when P&G is struggling to drive sales and other company representatives may be wondering if a new approach might be the best move for the company. P&G has been trimming costs for years, which has kept investors happy, but meaningful sales gains have been elusive. 

P&G is at the center of one of this year's biggest developments in digital marketing, namely growing demands from big advertisers for greater transparency in the media supply chain and reductions in ad budgets in response to the lack of clarity on ROI. In fact, one of the most direct impacts on agency revenue this year is major advertisers like P&G cutting spending. WPP cited this issue directly as a cause for a reduction in its growth forecast for this year.

Peltz’s emphasis on digital is interesting given the very public stance P&G has taken on the troubles inherent in digital advertising even while it cut $140 million from its digital ad spending in Q4 alone. Not all CPG companies are cutting digital budgets, with the white paper pointing to Clorox Co. as one that is continuing to invest more amidst assertions of its effectiveness.

P&G previously announced putting more dollars into linear TV, but under legacy rates that gave the consumer products giant low price hikes on already low prices compared to the rates other advertisers pay for the same spots.