- Procter & Gamble, the world's largest advertiser, plans to cut back on targeting its Facebook ads, according to the Wall Street Journal.
- The company found that it was targeting "too much" and "went too narrow" with its ad strategy on the social platform.
- P&G doesn't plan to cut back spending on Facebook, however, and said it would still use targeted ads for specific use cases.
With 1.7 billion monthly active users, Facebook has the scale and reach to segment its audience into hyper-targeted demographics for advertisers. But while Facebook's ability to target is highly coveted by brands, P&G is reversing course after finding that highly-targeted ads aren't necessarily as effective as broad reach.
P&G's experience shows the dangers of targeting too much in digital advertising for brands, and could herald a shift back toward campaigns focused on broader reach. A case study from a few years back shows how broad-based Facebook advertising was more effective than targeting for P&G: A campaign for Febreze air freshener that initially targeted pet owners and large families led to flat sales, but after the company expanded the effort to anyone over 18, sales began to rise again.
For Facebook, targeted ads are good for business: The more targeted the ad, the more the ad costs. The Journal reports that P&G’s experience may become something of a litmus test on how big brands approach digital advertising. If broad-based advertising outperforms highly-targeted ads, that may signal to marketers that broad brand awareness is worth more than targeted advertising that pushes consumers to buy.