Russell Parsons: The biggest indicator of engagement is sales

P&G is going back to the future in its plan to increase ad spend, aiming for reach among more broadly defined segments. Its objective is clear, and should be shared by all marketers – sell more stuff.

Russell Parsons

“Spending money on marketing grows sales.” I paraphrase but that was my takeaway after reading the commentary around Procter & Gamble’s full-year results last week.

Speaking as the FMCG giant posted a 3% drop in net sales for its fourth quarter and an 8% drop in full-year sales, CEO David Taylor was effusive about the merits of advertising and promotional spend as a means to build awareness and trial, promising to increase spend on everything from TV to digital, sampling and in-store – indeed on “any way appropriate” to meet those twin objectives as a means to grow share.

P&G is almost refreshingly old school in its broad approach. Reach matters more than having one to one “conversations”. Indeed, this week global brand boss Marc Pritchard told The Wall Street Journal it was planning to scale back its targeting of micro-segments on Facebook, for example in favour of platforms that allow it to have its cake and eat it. Or, as Pritchard  told WSJ, channels that offer the “most reach but also the right precision”.

It will not come as a surprise to anyone that the world’s biggest advertiser is a big fan of, well, advertising. Last year, Pritchard delivered what might have been my quote of 2015 when railing against marketers’ “apologetic” use of – and faith in – content as a means to appease the cynics. “I love advertising…it’s important for us to fall back in love with advertising,” he said.

Still, in the face of a decline both in earnings per share – attributed in part to an increase in marketing investment – and in sales, it’s a noteworthy statement from a CEO only just into his second yearP&G has freed up money to spend on top-line growth by culling 100 brands, which leaves spend focused on around 80 core brands, and an efficiency drive that has seen “non-working media” spend slashed, through agency consolidation and a drop in related production costs.

It shows, however, a refreshing faith in the ability of marketing to drive business growth. Indeed, If you strip out currency fluctuations and the effect of divesting brands, P&G’s sales increased 2% and 1% in the fourth quarter and full year respectively. Marketing boosts sales – P&G says so – and its example is something that should arm any marketer facing a cut to budgets.

Marketing, it is said by many, boosts engagement, a word increasingly bandied around as a means to judge success. But what does it actually mean? It’s a subject we explored in a poll of our readers that has thrown up some fascinating results.

Opinions on what the definition of engagement is are many and varied and clearly depend on what media channel is being analysed. I am with the 60% of marketers we surveyed who answered “a purchase”. I suspect P&G is too.

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