P&G's Pritchard cops to company overloading consumers with ads
- Procter & Gamble (P&G) began shifting marketing focus in several key areas after internal research uncovered the marketer was hitting the same consumers with 10 to 20 ads per month, CMO Marc Pritchard said at a VivaTech18 talk reported on by MediaPost.
- Pritchard admitted that P&G was "annoying the hell out of people" and suggested serving just three ads per month would help it achieve its goals. P&G began targeting more niche audiences, such as first-time moms or recent homebuyers. It also started buying most of its media in-house, saving 30% on digital waste and boosting digital reach by 60%.
- P&G has previously expressed frustrations with agencies over transparency, excessive fees and other issues, and also made moves to cut out ad clutter. In the past, the marketer's Olay brand would launch six different ads each year, but now it only releases one new national ad per year, along with supporting additional projects like the Olay skin adviser, Pritchard said. The strategy has saved P&G money and also increased brand engagement.
Pritchard has previously stated a need for the industry to cut out advertising clutter and also "crap" quality ads, but the VivaTech18 talk sheds light on just how far P&G has gone in peeling back its strategy, sometimes with a goal of serving just three ads per month for some of its brands.
When digital first emerged as a marketing channel, its big promises were massive scale and the ease of serving a high volume of ads online. However, the channel has recently reached new levels of maturity and come under growing scrutiny for a lack of transparency and brand safety — criticisms Pritchard has occasionally spearheaded — leading many marketers to trim back their spending and focus on fewer, higher-quality and more personalized experiences. A recent CMO Council survey revealed that 95% of marketers think digital media needs to be more reliable, and 21% have cut their ad spending due to questionable or false digital media reporting.
P&G's reckoning with digital has been perhaps most sharply felt in the agency space. The company, one of the largest in the world by media spend, has cut its agency roster by 60% over the past several years, saving $750 million in agency and production costs and improving cash flow by more than $400 million. In January, it announced plans to further reduce the number of agencies it works with by 50% with a goal of saving an additional $400 million, and has in the time since unveiled pilots of three new agency models that look to ground its strategy in creative innovation.
Pritchard and P&G's approach has faced some criticism of its own, namely from activist investor Nelson Peltz, who successfully won a hotly-contested seat on the board of the CPG giant after a recount vote late last year. Peltz has dinged P&G for not hiring more third-party digital talent and failing to innovate with digital initiatives, which he views as having put the company behind others in the category.
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