Pritchard’s Progress: P&G Marketing Chief On The Impact Of His Digital Ultimatums

Procter & Gamble Chief Brand Officer Marc Pritchard is pleased overall with the response to his tough talk of the past year.

And he’s optimistic that Facebook, Google and others will meet P&G’s deadline to align on third-party measurement standards and have their methods audited by the Media Ratings Council by the end of this year.

“We’re about two-thirds complete on these steps today and should be largely finished by the end of 2017, as requested,” he said during a presentation at the Association of National Advertisers Masters of Marketing conference. “This is a sea change in the digital media ecosystem, and nearly everyone is doing their part.

But even as Pritchard expresses satisfaction, P&G is dialing down its digital media investment. It slashed $100 million in spend earlier this year and cut its site list from thousands to hundreds, with no discernible negative impact on sales performance. And it has adopted a new targeting approach intended to improve reach while also reducing frequency.

AdExchanger caught up with Pritchard after his speech.

AdExchanger: You’ve said the transformation of digital ad sellers is two-thirds complete. What’s the other third?

MARC PRITCHARD: A big part of it is getting the actual Media Ratings Council (MRC) accreditation. Measuring viewability is working fine, as is making opportunities for us to buy on that standard. Third-party tracking is in place in many places. The antifraud piece is moving along. And there’s still a chunk of work to be done on brand safety.

The last step is ensuring it’s all accredited through the MRC. If anything were to push it off, it would be that, because of the pure amount of work that needs to be done.

If the MRC’s not done when your deadline passes, are you going to pull spend?

It’ll depend on how far along they really are. Is MRC taking time because of just plain volume of activity? If we feel confident that people are in place, then of course we will give the benefit of the doubt.

But I want to keep the pressure on. We can’t slip on this front. There’s a lot of money being spent.

P&G cut its digital ad spend by $100 million in March with no discernible impact on performance. How did that come about?

We did that because we just couldn’t be assured that our ads weren’t going to show up in the wrong place. We were concerned about brand safety.

The second piece, speaking to programmatic, is: We cut the long tail of websites. It was an interesting experiment that worked. There’s just a lot of waste out there.

Does your crusade to clean up the digital supply chain mask another story – that your early push into digital and programmatic just didn’t work?

I wouldn’t say that. I would say it worked, but it evolved. Ten years ago, we had about 2% of our money in digital, and it was mostly search. The ecosystem hadn’t developed yet. Over time, we worked with Facebook, YouTube, Twitter and so forth to frankly develop the ad ecosystem.

We started seeing good results. Over time, more money was shifting and prices were going up. Frequency was going up. We didn’t realize it until we got the transparency, but the reach was too narrow. We were not reaching a broad enough audience, and we were reaching them too many times. And so, we were wasting money.

So, we’ve pivoted to broaden the reach, reduce the frequency and then make sure we don’t show up in certain places. It’s a culling effect – greater focus to get greater effectiveness.

You’ve talked about how programmatic buying through Amazon and Alibaba is helping you reduce waste through smarter frequency capping. How does that work?

It just drives greater performance. It’s enabling us to know that we’re reaching Zach. Zach bought Tide three months ago. Maybe it’s time to ping him and suggest it’s time to buy Tide. It’s a higher level of propensity to buy. Once we’ve got you and you’ve bought it, we don’t keep serving you Tide ads.

What about accessing that data outside the Amazon system?

Right now, this stuff is still on their platform. There will be interesting future discussions about data.

But you’re not beating a drum about the data sharing yet. When we see Amazon launch its own laundry soap brand, will it partly have been your willingness to let them access your data that makes that possible?

The purchase data on Amazon and Alibaba is their data. We work in partnership with them to ensure we reach the audiences that are going to allow us to drive sales in their categories.

At the end of the day, the retailers, including Amazon and Alibaba, want their categories to grow. The largest source of growth for all companies is market growth, so if you can get the markets to grow, then all boats rise. The retailers have hundreds of competitors, so they’re going to be fairly agnostic to whoever helps drive growth the most.

Here’s the benefit: The largest brands tend to drive the most growth. if launching an [Amazon branded product] helps them build their category, they’ll do it. We’re finding, though, that limited assortment channels favor big brands like ours.

Are your directors and your executive team pushing you to go back to TV in a big way?

No, the only thing they would push us to do is find effective media. They want it to work. They are exceedingly supportive of the direction we’re taking. They see that if we’re spending money and it’s waste, cut that out.

Where we’ve increased some brands on TV, that has come from running in-market tests where we see if it’s really correlating to growth.

Activist investor Nelson Peltz is gunning for a P&G board seat and has proposed to split the company into three autonomous divisions. How would that affect Marc Pritchard and the work you’re doing?  

It doesn’t matter about me. What really matters is the employees of P&G, the community in which we operate and the shareholders. Splitting the company into three is a very bad idea. We’ve done a lot of analysis that indicates that it would add a lot more cost to the business.

This post was syndicated from Ad Exchanger.