P&G reins in its domains

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More than three years after Procter & Gamble Co. launched an ambitious Future of Advertising Stakeholders [FAST] summit to set rules for interactive advertising, P&G's own Internet marketing is morphing into a possibly less ambitious but more cost-effective system of targeted communication with high-value consumers.

P&G has about as many Web sites-300-as it has brands, which in turn have generated opt-in e-mail databases spanning millions, said Doug Milne, director of P&G's SmartWorks interactive and target marketing unit, speaking at a recent North American meeting of ICOM, an international network of independent ad agencies.

Now, P&G has set about making its vast interactive empire more efficient, trimming its interactive agency roster and support staff as the company looks to tighten its belt in all areas. P&G aims to pare its roster of 40 interactive agencies by half by the end of next year under a review launched in August (AA, July 23). The interactive support staff, which once numbered 16, is now down to three. And the company has established a common database and Web site development system, aiming to focus brand managers and agencies on what Mr. Milne calls "strategy, communication and big ideas" rather than technical execution.

"Early on, our agencies would build the same thing about 30 times over," he said. "We decided to take that capability and build it once into a flexible platform. ...What ended up happening is that we spent months and months on technology and databases, and the focus would be on project management and not on creative breakthrough. So we ended up in the market with things that were kind of lackluster."

While P&G brand managers sometimes couldn't develop interactive programs fast enough in years past, Mr. Milne now finds himself sometimes fighting a new battle-getting them to use what they already have.

"Despite the fact that we've learned a lot, our brands still aren't fully engaging in this space," he said. "You get someone from the brand running around saying, `We've been told we need to get back to basics,' which to our brands means back to TV....Funny thing is, some of the brands doing this actually have 25%-40% of their [target] user base in databases that they've been collecting through online e-mail programs and yet they're still dropping these things in favor of TV. And I say: `The first thing you should be dropping is your TV. You've got 40% of your key target audience that wants to talk to you.' "

Mr. Milne said at least a half dozen P&G beauty and baby-care brands have developed such extensive databases, which can be accessed at little cost through e-mail programs. While a typical consumer of a P&G brand generates $40 in gross profit a year, the high-value, high-volume consumers in these databases may yield up to $100. P&G e-mail and consumer direct programs, such as its "S" [for Simplicity] online magazine (www.s-mag.com), can reach them for far less than the $4 to $8 it costs to reach them via TV, he said.

Of highest value for many P&G brands are teen girls the company hopes to convert into lifelong consumers. In one sign its online efforts are connecting with them, "Ask Iris," a girl's health feature of P&G's BeingGirl.com site, developed and promoted through Bolt.com to back P&G's Always and Tampax brands, gets 30,000 e-mail queries a week from girls.

With numbers like that, interactive marketing still has a bright future at P&G, Mr. Milne said, despite any nostalgic longing for the old-time religion of the 30-second TV spot. He estimates the company's marketing efforts today are about 25%-30% Internet-enabled direct-to-consumer, compared to 5%-10% five years ago. He'd like to get to 50-50, or at least 60-40, but said it will take some work.

"Clearly some of our senior managers are very much behind this," he said, "and we're slowly helping the brand groups think differently."

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