Studies: P&G's ad budget reductions translate to fewer sites, DSPs
- Procter & Gamble Chief Brand Officer Marc Pritchard kicked off 2017 by hammering on the messy, non-transparent state of the digital media supply chain, and his brand has since put some serious power behind shifting attention away from digital until these issues are addressed, according to analyses by multiple ad tracking firms reported on by Digiday.
- Hitwise, a web traffic measurement firm, found a 15% decrease in the number of sites sending traffic to P&G's online properties, an indication that the CPG giant is advertising on fewer websites. Pathmatics reported that P&G dropped its demand-side platform (DSP) usage from eight to four, a move that might've helped it limit the number of websites it advertised on, Pathmatics CMO Ken Roberts said in the Digiday report.
- While these don't provide a clear window into P&G's strategy coming from third parties, one ad buyer told Digiday on conditions of anonymity that the brand likely used a whitelist to limit its ads to pre-approved websites rather than a blacklist which only restricts certain sites. Whitelists are more restrictive and Advertiser Perceptions noted just 14% of marketers utilize the strategy.
Few marketers have guided the industry conversation this year more than Pritchard and P&G, who are, based on these analyses, not just talking the talk but actually committing to a considerable pullback in their digital strategies. P&G is the largest advertiser in the world by media spend and the ripple effects of its digital call to action, coupled with ongoing political and economic uncertainties in the market, have rattled the ad space in recent months and possibly hurt the bottom lines of the big agency holding groups.
In its Q4 earnings report from July, P&G announced it had cut spending on digital ads by $140 million during the quarter — a change that didn't hurt sales, with the company actually beating analyst expectations. The Digiday report offers more perspective on what that curtailing of ad spend looks like in practice. P&G reportedly peeling back on websites serving its ads and also DSPs reflects other recent cases where the slashing of digital advertising plays has not had a tangible or immediate impact on business success. JPMorgan Chase in March cut the number of websites programmatically serving its ads from 400,000 to 5,000 with little change in the cost of impressions or visibility of those ads.
Even as it's molded some of the big trends this year, P&G has hardly been free from scrutiny. Activist investor Nelson Peltz — who is currently seeking a board seat at the brand's upcoming Oct. 10 annual meeting — last month published a white paper that criticized P&G for not keeping up with competition in digital. The CPG quickly responded with a release highlighting its digital successes, especially its $3 billion e-commerce business.