When Procter & Gamble Cut $200 Million in Digital Ad Spend, It Increased Its Reach 10%

Unilever is also reevaluating its budget

Pritchard continues to evaluate P&G's digital spend.
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2018 is already shaping up to be a year when both Procter & Gamble and Unilever, two of the biggest CPG brands in the world, are demanding more out of their digital advertising by putting pressure on platforms and asking agencies to clean up their act.

As part of P&G’s recent work to reevaluate its marketing spend and weed out spend that is ineffective, the CPG giant said it cut $200 million in spend in 2017. Last year, P&G revealed during an earnings call that it cut between $100 million to $140 million between April and July due to bots and brand safety concerns. The measures then continued for the rest of 2017, with the brand cutting roughly another $100 million between July and December.

P&G’s $200 million digital cut were reinvested into areas with “media reach” including television, audio and ecommerce. During a speech at the Association of National Advertisers in Orlando, Fla. today, CMO Marc Pritchard declined to name specific companies where the ads were pulled from but said that it reduced spending “with several big players” by 20 percent to 50 percent. He added that the cuts helped P&G eliminate 20 percent of its ineffective marketing and increase reach by 10 percent.

Pritchard said that the brand’s year-old mandate asking for all partners to clean up shady and murky practices is working. More importantly, P&G has not pulled any media spend because of lingering concerns about the Media Rating Council’s third-party viewability metric, but they have pulled spend due to other issues like brand safety.

“This new level of transparency is shining the light on what’s next—marketers taking back control of our own destiny to accelerate mass disruption—transforming our industry from the wasteful mass marketing we’ve been mired in for nearly a century to mass one-to-one brand building fueled by data and digital technology,” Pritchard said in a transcript of prepared remarks.

Pritchard’s remarks come only two weeks after Unilever marketing chief Keith Weed made similar remarks at the Interactive Advertising Bureau’s Annual Leadership Meeting in Palm Desert, Calif. Indeed it seems like CPG CMOs who control some of the world’s biggest budgets are the folks that the advertising industry has deemed important in putting pressure on platforms, ad-tech vendors and agencies.

Pritchard has been particularly vocal about transparency issues in the digital media supply chain, including viewability, fraud, a lack of measurement and murky contracts. Collectively, those efforts are 90 percent complete, Pritchard said.

Those efforts include asking so-called walled gardens like Facebook, Google and Snap to receive third-party measurement accreditation from the MRC, which is underway by the tech platforms but not complete.

In the meantime, Pritchard seems content with the platform’s content control tools. When a PR disaster around Tide Pods began brewing on digital platforms (where consumers eat the laundry detergent packets as if they were candy), Pritchard said he was impressed with YouTube, Facebook and Snapchat’s response.

“Within a matter of hours, [YouTube CEO] Susan [Wojcicki]’s team swept the entire YouTube platform clean of these dangerous videos and changed the algorithm to ensure Tide’s safety video reached anyone searching for this unsafe behavior,” Pritchard said in the transcript. “Within minutes of contacting them, Carolyn Everson’s Facebook team, and Imran Khan’s Snap team did exactly the same. This not only reflected the right attitude, it demonstrated that the work over the past year gave them better control over their platforms.”

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