Ritson: P&G’s Marc Pritchard has made the biggest marketing speech for 20 years

Procter & Gamble chief brand officer Marc Pritchard laid into Google and Facebook’s ‘walled gardens’ and demanded transparency from the digital supply chain, heralding a new era in digital advertising.

Watch Marc Pritchard’s speech here.

Marc Pritchard is not a big man. There is no definitive reference to his actual height in any of the extensive bios of Procter & Gamble’s chief brand officer but, if I had to guess, I’d say he stands about  5’11” in his stocking feet. On Sunday, however, Pritchard cast a very long shadow across digital marketing and beyond it to the future of global brand communications.

He has made big speeches before, several quite revealing. But at the weekend he obviously decided to deliver four different gigantic messages in one simple speech to a presumably startled audience at the Internet Advertising Bureau’s annual leadership shindig in Florida.

First up was the increasingly dodgy world of programmatic, and specifically the long list of ad tech vendors who each “punch their ticket” and take a significant slice of the client’s media investment long before it ever reaches a publisher or platform.

“We serve ads to consumers through a non-transparent media supply chain with spotty compliance to common standards, unreliable measurement, hidden rebates and new inventions like bot and methbot fraud,” Pritchard announced.

READ MORE: P&G issues call to arms to ad industry over ‘antiquated’ media buying

His claim that this supply chain is “murky at best, and fraudulent at worst” is the clearest signal yet that client companies are finally starting to question the gleaming technological promises that were made about programmatic and digital media in general. Of the four areas of improvement this was perhaps among the most important but also the least specific in terms of action steps to remedy the situation.

Second, Pritchard talked viewability standards. Comparing the current chaotic variations in what constitutes a view on different digital sites to a football game in which each team sets their own definitions of a goal, Pritchard spoke with apparent frustration about the “enormous” amount of work his teams had put into monitoring the disparate viewability approaches of Facebook, Instagram, Twitter, Snapchat, Pinterest, Pandora, YouTube and others.

There is no sustainable advantage in a complicated, non-transparent, inefficient and fraudulent media supply chain.

Marc Pritchard, Procter & Gamble

Then, quite abruptly, he called time on the whole charade and announced that P&G was adopting the Media Ratings Council (MRC) standard and would expect all its agencies and media suppliers to follow them before the end of the year. Just like that. Bang!

This is a mixed message for marketers. The good news is that a single viewability standard is much needed. But the MRC thresholds for viewability are on the lighter end of the spectrum requiring only that at least half the ad be visible for one second for display advertising and two seconds for digital video. This is a very low bar but, if P&G gets its way, it could well render any half-glimpsed two-second video as being “viewed” for many years to come.

Pritchard was not done yet. In the biggest move of the speech, he decried the closed measurement systems of Google and Facebook. He offered up a “confession” that when P&G first embarked upon digital advertising it had traded its usual rigour for the first-mover advantage that these “latest shiny objects” might confer.

Well, Pritchard continued, “we have come to our senses” and will no longer accept publisher self-reporting without external verification.

By the end of the year P&G expects all its partners to adopt third-party, accredited verification of audience numbers. The “gig is up” he told his by now spellbound audience. The P&G shears are coming out and the “walled gardens” are about to be pruned back.

Finally, as if that was not enough, Pritchard moved to agency transparency and the fallout from the 2016 ANA report on media agency contracts and remuneration.

READ MORE: What marketers need to know about the ANA media transparency report

At the time I commented that the big surprise in the report was the number of clients who literally had no clue that there were shenanigans afoot in the industry and with their media budgets.

Time and again marketers were interviewed in that report who clearly had no idea what had been going on. Remarkably Pritchard confirmed that P&G was very much part of that ignorant group.

Apparently, after the ANA report was published P&G did its own digging and found an agency contract that allowed the agency to act as a principal and earn undisclosed commission on media it sold to P&G. These so-called ‘sur-commissions’ were at the heart of the ANA report and Pritchard’s response to the fact that P&G was unknowingly embroiled in the issues was immediate. The company is now “poring over every agency contract for full transparency by the end of 2017”.

Again, the implications for marketers are enormous. If P&G – the biggest, smartest and usually most fastidious advertiser in the world – can find itself on the receiving end of sur-commissions it’s clear that any client company could also fall victim. Careful scrutiny of media contracts, commissions and the procurement of production companies should not just be a focus for P&G but all advertisers from this point onwards.

It’s easy to resort to hyperbole in columns like this. But I have thought long and hard about the sentence that follows this one. This is, by some way, the most important speech in marketing since Unilever’s then-CEO Niall FitzGerald laid out his “path to growth” in 1999 and started the era of brand consolidation that continues to this day.

In one short speech Pritchard attempted to reassert P&G’s leadership position as the most important marketing company in the world, make programmatic ad buying transparent, fix global viewability standards, remove the walled gardens and establish a new level of probity in all agency contracts.

Whether he and P&G will succeed is an entirely different question. It was a bold speech with a clear timeline that demands everything be done by the end of this year. But we live in a digital duopoly. While P&G and its $7bn annual ad spend makes it the biggest player in town, the game itself is owned and run by two global behemoths in Google and Facebook that are, respectively, two-and-a-half and one-and-a-half times bigger than P&G.

It would appear unlikely that either Google or Facebook would let P&G dictate terms to them. It seems even more unlikely that the walled gardens could be brought down with just one simple speech.

Nonetheless, Pritchard just wrote his name into the annals of marketing history. More importantly, his speech on Sunday signals the end of the early stage of digital advertising and the beginning of its maturity as the biggest single form of advertising in the world.

Pritchard admitted as much at the end of his speech. “We’ve been giving a pass to the new media in the spirit of learning,” he explained. “We’ve come to our senses. We realise there is no sustainable advantage in a complicated, non-transparent, inefficient and fraudulent media supply chain.”

Time will tell whether others will come to the same realisation. There can be no bigger question in marketing in 2017 than that; or, indeed, any more dramatic or eloquent way to pose it. We are about to find out how far Marc Pritchard’s shadow will stretch.

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Comments
  • Alex Haitoglou 31 Jan 2017 at 2:21 pm

    Fully agree Mark, a very important speech. The hope is that other big players will join in, and drive change in the “duopoly”, especially on the third party verification. But even if not, it is bound to generate at least some change. Also, as an ex-P&Ger, one of the few things the last few years that bring back the clout of the company that in many ways pioneered marketing for many decades. More to come for sure, let’s pick it up in 3-6 months 🙂

  • Gary M Cook 1 Feb 2017 at 8:14 am

    Mark an excellent summary and appraisal and as with Alex; let’s see you pick up things in 6 months to see what has been added to the piece. Thank you for sharing…

  • David Howlett 1 Feb 2017 at 9:31 am

    I agree that this is important, but that’s mainly because it’s a crying shame that a Marketing Director has to get involved in the dodgy stuff that’s going on in the hinterland of marketing, rather than focus on the strategic priorities. Marc, in his speech, is overstating the issue when he expresses surprise that USD 200 billion advertising is not growing his US market. I am afraid I don’t agree that media buying or a broken advertising model is the main cause. It’s far more to do with fact that the developed world just has so many great products to choose from; we all consume more food than is healthy, and we are slowly switching from being a “product-led” society to an “experience-led” one. Brandowners of consumables have a big problem. Volume increase at market level is almost impossible in many markets. And value per unit increase is hard work, and I suspect it won’t offset volume decline in most food & consumables markets. That’s the big story: how a business like P&G can keep that growth coming in its main developed markets against the law of diminishing returns.

  • Francisco Hernandez Marcos 1 Feb 2017 at 12:29 pm

    It’s a great article Mark. Thanks.

    But let me add something. Part of the problem is that giant brands such as P&G’s are broadly thinking of Digital as they do for TV. They do have an obscure Internet marketing chain partly because they see Internet as another media to send the message to consumers who go back to the supermarket and deal with the company in the usual way.

    And it’s not. It’s much more than that. Internet offers a huge range of opportunities that they simply miss out, or at most they try modestly. Big brands miss out the power of the Internet while small brands are able to profit from it. Usually they are not so much worried about measuring the darkness of the value chain, but they establish simple business models and just measure the input and the output. Think of Netflix or Ocado for instance. Do you think they face the same problems P&G does?

    The bottom line: to take full advantage of digital ads you need to become a digital player somehow. Having one step in each side is a very expensive and unsustainable strategy.

    I am not saying it is easy, specially for the kind of products P&G sells, but P&G and other big brands need to think broadly about Digital Transformation reshaping their business models.

    Regards
    Fran
    A 2002/03 MBA student of you in London

    • Heather Johnston 6 Feb 2017 at 12:30 pm

      It might be more telling if your ‘successes’ had any success as businesses. Most digital media groups lose money, some of them enormously. P&G have had their problems, but they know absolutely that without profits, there is no future. (You could try an alternative view on your bank manager – let me know how that works out). You have a future by investing in honesty, to yourself and others, not playing games with figures. The way these media organisations keep afloat is to manipulate cashflows, and that can’t last forever. P&G, the master marketers, are saying there is a vast web of companies selling ignorable advertising through murky channels and peeling off commissions at each step , and it is hard to disagree.

  • Zbiggy Ucinek 1 Feb 2017 at 2:56 pm

    Halle Bloody Lujah! At last someone that has finally understood “the emperor has no clothes.” As someone who spent their career mainly responsible for global brands prior to establishing a high end, internet publication, I can’t believe how crap digital advertising standards are. When the IAB accept a 50% pixel view as a viewed ad you know the system is rotten to the core. Coupled with the fact we approached a supposedly reputable media buying company and walked away when they informed us they would not allow us to tell their clients where they were featured. David Howlett while you may have a point the simple fact is you have clearly not got the serious issue of the post, what is the point of painting a masterpiece, spending millions and then discovering no-one has actually seen it?

  • Nicky Bushnell 1 Feb 2017 at 9:10 pm

    About bloody time ! good to read.

  • Robert Catesby 2 Feb 2017 at 10:40 pm

    It is great to see digital viewing standards being pushed, but why is the demand on digital a totally different standard than has been allowed to continue in all other media placements? Why should the whole media ecosystem not be held to the same standards? Get rid of the dodgy stuff in digital – definitely ! But whilst you want to judge every single impression served (and you should) why has this not been done in all the other media placements made. Refusing to judge every single impression on TV as to whether a someone is in front of the set and is seeing it ‘enter the frame’ as opposed to being out of the room or engaging in something else and not watching the ad? The answer in Mark’s speech seems to be ‘TV’s not perfect, but f*ck it : we all know and have accepted that’. Accepting this and demanding different standards elsewhere is talking out of both sides of your mouth. Clean it all up – don’t give a free pass to the money wasted in other media just because you’ve failed to address it before. This rallying cry to the industry should include digital, agency behaviour plus the much bigger cost of money wasted in other media.

  • Jeffrey Merrihue 9 Feb 2017 at 9:48 pm

    The idea that digital has had a hall pass due to being new and experimental is undermined by the fact that agencies have been collecting Volume Bonuses on TV for decades.

  • Sandra Pickering 12 Feb 2017 at 1:27 am

    Bravo.
    I hope Marc Pritchard’s example will nudge CMOs to stop paying for all the other stuff that no-one in their organization can explain clearly and transparently.

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