August 10, 2017 - Comments Off on P&G Asserts their Clout for More Effective Advertising
While the larger advertising media economy seems to tell a story of “more digital, more often” Broadcast TV is still the largest bucket of dollars in media buying. Even today, with viewership moving to streaming content, it is only surpassed by “Digital” when you aggregate ALL of “digital everything” into one bucket. That’s search, display, social, mobile, video, etc.
All of these digital subsets are relatively new on the media scene. They are interactive. They are more measurable. Most notably there’s spiking investment in expanding mobile advertising inventory as users spend more time with more personalized technology. This story has been drawing attention for several years, and it informs the narrative of where advertisers need to be.
The same story becomes more interesting when you isolate some of the more significant data. “More measurable” does not inherently mean “more meaningful” or “more valuable” and there’s one dramatic example of this playing out right now.
Procter & Gamble is the most heavily invested advertiser on the planet and if we look closely at what they’ve done in the past year, they seem to be moving in a contrary course to the bigger narrative.
They’re #1 with dollars. They have the clout to steer the entire ad landscape, and that’s exactly what they’re attempting to do. While the rest of the advertising world seems to be re-allocating from more conventional channels to emerging ones, P&G Chief Brand Officer David Pritchard has recently highlighted some stark realities and concerns about the state of the digital advertising industry.
Digital media and advertising technology have been battling the issues of waste, fraud, and privacy concerns all along. Confronting these issues requires vigilance and often more costly specialized layers in the tech stack. After all, only about 40% of digital ad spend goes to the publishers. The rest goes to vendors promising to add value and relevance to the buy.
Understanding this in great detail, Pritchard states that reducing wasted spend would mean more budget for effective advertising and better results.
Viewability, fraud, wasted impressions, and inconsistent measurement standards between vendors and platforms all contribute to a less-than-focused attribution of value. The industry is evolving but P&G is spending billions in the meantime and wants it fixed yesterday.
The old adage, “I know half of my ad budget is working but I don’t know which half.” has become relevant once again. The measurability of digital media was supposed to address the ambiguity of value. But as the entire landscape has become enamored with data and engagement, many are turning back to the awareness and recall as the most reliable value. The exploding industry has generated an excess of incidental metrics and inconsistent measurement to derive them.
At the IAB’s Annual Leadership Meeting in January, Pritchard declared that P&G would not spend money on companies that didn’t comply with industry standards for measurement and verification, stating,
“When we have that [an upheld standard], then you [advertisers] have the transparency to make choices based on the quality of the media, as opposed to someone grading their own homework.”
In the 4th quarter P&G cut $100 Million of digital advertising spend without a change to the company’s growth rate. As a result, P&G was encouraged to aspire toward a presently impossible standard, “100% viewable, fraud-free, effective digital marketing.”
This aspirational accountability has a lot of folks in the ad world feeling nervous about what’s possible. But rest assured, it’s nothing but great news for advertisers and the marketing industry itself when someone who understands the landscape and the math is able to articulate and incentivize a new expectation.
Pritchard is putting action and company money behind a clear and worthy vision.
What does this mean for Main Street? For regional brands? For the businesses that are getting happy results out of Google and Facebook advertising? In the meantime, it means be happy that big players are becoming activists to shape a better reality for where you may be headed.
What’s the big picture POV?
The digital advertising industry is coming out of its infancy.
Companies must experiment to innovate and prosper. In competition, you can’t wait for everything to become simple or tidy. Part of that entails jumping into a complex arena and holding steady with a clear objective and a meaningful measurement plan.
There are sound methodologies for how to do this. For instance, adopt a 70/20/10 rule for your media planning.
The uncertainty and variability in this rapidly changing landscape is why giants like Google and Facebook own such a disproportionate share of the ad spend. They have built their own environments. They are not operating on the “open internet.” They are large enough to set their own rules and train advertiser expectations.
Pritchard is banging a gong for better value that will echo loudly. A wider expectation of better compliance and established standards could be the necessary catalyst for better investment. Google, Facebook, Amazon and App Nexus can’t be the only entities standing, but the current Lumascapes have gotten out of hand. Nobody wants to deal with all of that “value.”
I expect this progress may be the much-needed nudge to trigger a wave ofacquisitions and consolidation in an overcrowded field. And in the meantime, more conventional channels reclaim relevance as awareness value seems to be reclaiming equity.
Director of Interactive Media