The long look at today's P&G in this issue shows a giant in the throes of trying to change itself, a mix of promising new initiatives against a broader background of stubborn problems. Advertising is supposed to sell stuff, and P&G's overall sales have lagged its industry, other blue chip companies and just about any other reasonable comparison in recent years.
Too little new product innovation is at the heart of P&G's current stagnation. P&G today is being pushed off TV, for decades its prime selling platform, by brands in other product categories that have fatter profit margins because they offer more compelling benefits to consumers than most P&G goods. Its efforts to go to market more efficiently by building grass-roots buzz to leverage traditional mass marketing seem promising. But advertising creativity and efficiency are no substitutes for what made P&G the force it was: Its ability to develop new products that met real consumer needs, and to communicate those benefits to consumers clearly and compellingly. New P&G brands Febreze, Swiffer and Dryel are proof it can still do this and create genuinely new business in an industry where most gains come at the expense of someone else.
Ultimately, category leadership means little. Perceived interactive or marketing leadership means nothing. If P&G is still going to matter years from now, innovation leadership means everything.