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The world’s largest consumer goods company, Procter & Gamble (P&G), is keen to eliminate advertising waste, especially in the digital domain, as it pushes for greater transparency in media relationships.
After vice-chairman and chief financial officer Jon Moeller, P&G’s chief brand officer Marc Pritchard has now emphasised the need to reduce wasteful advertising on digital platforms that do not reach intended audience.
“Transparency shined a spotlight on reality and we learnt valuable lessons, which are driving profound change,” Pritchard said.
The use of data and analytics had allowed the firm to reduce digital ad spends by $200 million in 2017, he added.
P&G's digital spending in 2017 constituted a third of its global advertising budget of $7.1 billion.
More such cuts would be initiated this year as the company sought greater return on investments from digital advertising, Pritchard said.
At a broader level, P&G has already indicated earlier this year that it would slash its overall advertising budget by $400 million (this will include digital advertising) as it looked to introduce a new agency model and reduce its agency partners by 50 per cent.
Addressing investors during a conference call last month, Moeller had said the firm would push for more precision media buying and look for private market-place deals with media companies.
“It is becoming clearer to us that there is more opportunity in eliminating waste, reducing non-viewable ads, as well as stopping ads adjacent to inappropriate content,” Moeller said.
The Indian unit of P&G did not respond to an email sent to it.
However, according to industry experts, the local unit will implement the global mandate as digital advertising in the country grows.
Most advertising expenditure (adex) reports by media agencies have pegged the size of India’s digital advertising market at nearly Rs 100 billion, projected to grow at 25-30 per cent over the next few years. Digital is the third-largest advertising medium after print and television in India, and is estimated it will reach Rs 125 billion in 2019.
P&G manufactures and markets brands, including Ariel, Tide, Whisper, Pantene, Gillette, Oral-B, Head & Shoulders, Olay and Pampers, in India. The company has an overall advertising budget of around Rs 7 billion, according to the latest Pitch Madison advertising report.
Last month, P&G’s arch-rival Unilever said it would reduce online ads on platforms that propagated inappropriate content. The firm also said it was working with IBM to develop a block-chain to address transparency and trust issues among its advertising partners.
