Programmatic Pays Off Big for P&G, but Obstacles Loom

Scarcer Video, Lack of Mobile Standards and Connected Device Measurement Limit Expansion, Agency Exec Says During AAF Panel

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Programmatic digital media buying is delivering huge improvements in return on investment for Procter & Gamble Co., but measurement and market obstacles limit expansion somewhat for now, said an agency executive who has worked with the giant marketer.

Speaking Wednesday on a panel at the American Advertising Federation's D2 Digital Dialogue conference in Cincinnati, Scott Franzer, who identified himself as associate director with Omnicom Media Group, said P&G is seeing "three to five times greater ROI through programmatic buying than we are through traditional environments." Mr. Franzer formerly worked on P&G programmatic efforts at Starcom Mediavest Group, which lost most of its P&G North America business to OMG and Carat following a review last year. An OMG spokeswoman said Mr. Franzer has not yet begun working for OMG.

Credit: Courtesy Procter & Gamble/Business Wire

P&G set a goal of buying 70% to 75% of its digital media programmatically in 2014, according to people familiar with the matter, though it hasn't confirmed that, and Mr. Franzer didn't address the programmatic share of P&G digital buying. But he said after a big run up in programmatic digital buying in recent years, some obstacles make further expansion harder.

"At P&G for the past three or four years you have seen brands double year over year their amount of video they're purchasing," Mr. Franzer said. "We're actually at a point now where video is scarce," though other formats, such as banners are plentiful, even with much inventory having been wiped out by higher viewability standards.

The video scarcity applies "more for the short-form stuff," which Mr. Franzer defined as five to 15 seconds. "For long-form there is definitely still a play," he said.

Other factors also limit how much deeper P&G can get into digital right now, Mr. Franzer said, such as lack of an industry standard for viewability on mobile devices. The Media Rating Council is expected to propose standards for mobile viewability soon.

And while P&G sees buying programmatically against audiences on TV-connected devices such as Roku, Chromecast or Apple TV as intriguing, lack of strong audience measurement is a limitation, he said.

The majority of P&G's TV dollars will keep going through network buys and the majority of its video through other digital avenues with better audience measurement "until that data set really increases available insight on who you can effectively target on connected TV," he said.

Mobile is enough of a challenge at this point, with 60% to 65% of some brands' targets accessing online content primarily through their mobile devices, Mr. Franzer said. And the company is looking to solve the riddle of following its target audience (anonymously, of course) in a cookie-less world across devices.

P&G is "leveraging data" around internet protocol (IP) addresses, he said. "You can visibly get somebody out of their home and realize what devices they're on cross screen, and then tie that back to who they are, where they are at, where they work, and again gain insight to so much data around what they're using and track that across screens."

A lesser challenge for P&G is election season, Mr. Franzer said. But programmatic digital is one area where a big national advertiser like P&G is affected by the political ad glut even though it never buys much spot TV or radio.

"I would say it's very similar to Christmas," he said. "Prices tend to increase a little bit. You have to increase your bids. I wouldn't say it's significant, but when you're talking millions of dollars, it's a massive drop in the bucket."

Alec Rivera, VP of programmatic strategy and enablement for Nielsen Catalina Solutions, speaking on the same panel, also identified programmatic TV buying and reaching consumers using TV-connected devices as big opportunities -- and challenges -- for clients. Nielsen has been in discussions with Adobe among others about improving audience measurement for programmatic ad buys on connected devices to permit programmatic buys, but hasn't concluded that yet, he said.

Nielsen Total Audience Measurement does use the company's TV ratings panel to deliver ratings across a wide variety of digital content and devices, but that delivers gross rating points for broad demographics rather than a view into the individual consumer profiles necessary for programmatic.

"We have some really good progress in that direction and struck up a relationship last year with Roku," said Megan Clarken, exec VP of global product leadership for Nielsen in an interview today. "Any advertiser who wants their programmatic or dynamically measured ad delivered through Roku [the service] has the ability to just turn that on."

Nielsen is looking to extend that service to other connected-device providers by tagging ads with software, she said.

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CORRECTION: An earlier version of this story identified Scott Franzer as an Omnicom Media Group associate director, as he did at the AAF's Digital Dialogue conference. An OMG spokeswoman later said Mr. Franzer is not yet an employee, but is in the process of being hired.