P&G puts focus on reach: It’s a more important measure than spend
The marketing boss of the world’s largest advertiser is more interested in measuring reach than spend, with P&G increasingly finding it can use money that would have been “wasted” on frequency to boost the number of people it reaches.
Procter & Gamble is reinvesting the parts of its media budget it found were being wasted into increasing the number of people it reaches rather than worrying about how much it is spending overall.
Speaking to Marketing Week at the Cannes Lions Festival of Creativity, P&G’s brand boss Marc Pritchard said the focus for the company is on reaching more people, which it is looking to do by reducing frequency, particularly online.
“The reason I don’t want to talk about spending anymore is because that’s not what’s important. What’s important is how many people we’re reaching,” said Pritchard.
“We’re finding that we’re reaching more people and we’re trying to reduce the amount of times we reach the same person over and over again. Excess frequency is the biggest waste and in every aspect of our media we’re finding waste to allow us to be able to invest back in creating reach.”
Driving up reach is key as P&G looks to increase the volume of search queries around its brands. Pritchard said that search has become a key metric for the company in terms of determining the effectiveness of its creative and campaigns because it shows the advertising has piqued people’s interest and driven them to find out more.
“The best measurement is people who are searching,” Pritchard said. “So when we see an increase in search we see an increase in sales.”
Reducing waste has been a key part of Pritchard’s attempts to improve the effectiveness of digital ad spend and clean up the “murky” digital supply chain. It has been almost 2.5 years since his watershed speech, which came amid growing concerns around brand safety, viewability and fraud.
Those concerns led P&G to cut its digital ad spend by $200m, a reduction that it found didn’t reduce the effectiveness of its advertising or impact sales. While Pritchard wouldn’t say whether that figure increased or decreased last year, his biggest frustration remains with the media supply chain.
READ MORE: Will other brands follow P&G’s lead and cut digital ad spend?
“There is still a lot of work to do on cleaning up the media supply chain,” he said. “A big part of that is that a lot of the platforms created in the digital world were created not necessarily for advertising. We, advertisers, help monetise that. And now we’re trying to retrofit that and that’s taking longer than I’d like.”
He does believe that things have changed “quite substantially” over the last two years and said the industry is now moving to what he calls “transparency 2.0”.
“That is auditing of brand safety and control over content quality, civility of editorial comments and cross-platform measurement to ensure we don’t have excess frequency of advertising. That’s the next generation,” Pritchard said.
However, he is clear that Facebook and Google still need to do more, especially when it comes to ensuring they have control over their content, and that P&G will “keep pushing them” to make their platforms safer for both consumers and brands.
Bursting advertising’s bubble
At the beginning of the year, P&G’s shaving brand Gillette waded into the debate around toxic masculinity in the wake of the #MeToo movement.
It was an especially divisive campaign, which saw consumer perceptions of the brand plummet in the UK. But Pritchard maintains it had the effect P&G was hoping for in terms of getting people to pay attention to Gillette and talk about an “important topic”, as well as boosting online sales.
“We found it was broadly appealing, unlike the social media rhetoric that came from a very small but vocal group that was then amplified by the press, which is understandable because it was somewhat controversial,” he said.
“It was particularly appealing to Gen Z and millennials and it had a positive impact on our online sales.”
P&G is not new to controversial advertising. It’s 2017 campaign ‘The Talk’, which explored the issue of racial bias in the US, was both praised and criticised. And it has followed that up with a new ad, called ‘The Look’, that once again tackles the issue.
P&G more broadly is looking to new ways of how it can have a positive impact on society and “burst the bubble” advertising has been stuck in for so long.
Partnerships are key to this, with the advertising giant unveiling a series of new collaborations at Cannes today.
This includes a creative partnership with John Legend that integrates multiple genres to explore various aspects of humanity and the human experience – such as parenthood, modern masculinity, music and social justice – with P&G and its Pampers, Gillette and SK-II brands.
It has also partnered with Arianna Huffington’s Thrive Global, which embeds “micro-step habit stacking” into P&G brands such as Oral-B and Crest, Pampers, Venus, Secret and Pantene, blending cognitive and behavioral science with life science to help consumers reduce stress and improve daily health.
“I don’t know why [advertisers have] been in our own bubble,” Pritchard said. “But what we’re seeing increasingly is when we merge with other creative worlds, you can get a real abundance of creativity to where ads are not really like ads as we know them, and you move experiences to being engaging, useful and entertaining.
“We are reimagining creativity to reinvent advertising. Advertising is being disrupted and we want to lead disruption.”
People keep reinventing discoveries and calling it original.
In a seminal piece of research, “Why Brands Grow” published in the Journal of Advertising Research in Jan/Feb 2002 (Vol. 42, No. 1), Allan L. Baldinger (IPSOS-NPD), Edward Blair (University of Houston) and Raj Echambadi (University of Central Florida) concluded that increased market penetration (essentially reach) had the highest correlation with share growth. Specifically:
• On average, brands that grew penetration also grew market share (average share change = 2.76 percent), brands that held penetration held share (average share change = -0.12 percent), and brands that lost penetration lost share (average share change = -2.75 percent).
• Likewise, on average, brands that grew loyalty grew share (average share change 2.16 percent, brands that held loyalty held share, and brands that lost loyalty lost share (average share change = -2.35 percent).
• Examining penetration and loyalty in conjunction, we see that penetration is the key. Brands with high penetration performance gained share regardless of loyalty performance, and brands with low penetration performance lost share regardless of loyalty performance.
• However, loyalty strongly leverages the effects of penetration.