Is P&G's Biggest Innovation Old-Fashioned Functionality?
I'm suspicious of those in the business world who push "innovation," but I'm starting to think that P&G's brands are onto something, and that it has nothing to do with branding.
P&G is certainly a marketing powerhouse. It just announced that it would raise its already record-setting global ad spending by another $700 million to total $9.3 billion by next summer. If ever there were a full-employment act for marketers, P&G would be its patron saint.
What's it got to tell the world that 's so important?
Enter innovation. New products that address new needs, and old products that address old ones in new ways. P&G has been innovating since the early 20th century, like when its researchers set out to replace the flaky performance of laundry detergent and discovered synthetic surfactants. Named Tide, the company kept improving its formulation every year after introducing it in 1946, and invented a new social marketing medium -- "soap operas" on TV -- to promote it, wrapping its marketing with guilty-pleasure characters and weekly cliffhanger endings. The stuff was dumb. It made the Old Spice YouTube campaigns look like Kurosawa.
The messages subsequently went through endless variations and abuses, but were always intended to drive experiences of the same functional idea: We've innovated a better soap for this or that need, and here's why. People kept on buying the stuff because it worked, not because they liked the marketing. Routines and habits were established.
Back then, nobody talked about "innovation" separate from the conduct of business, and finding the output of this operational reality and connecting it to customers was what ad greats like David Ogilvy meant when they talked about "branding." He often said that ads didn't dictate image but contributed to it. Brands were built from the ground up, and the only branding metric that mattered was sales. It's why P&G still refers to its business units as brands; the latter derived from the performance of the former, measured in legal-tender currency.
Today, however, P&G spends a good chunk of its mind-numbingly huge marketing budget on ads and social campaigns devoid of functional information, and instead in service to the rubric that its brands have images, personalities, attributes and relationships somehow apart from any ability to remove stains or make teeth whiter. Its innovation efforts are also mucked up with nonsense about social linkages and technology platforms, even though anybody who has had a real job for more than a few years knows that pulling a handful of coworkers into a room will yield more good, actionable ideas than any complicated or subtly nuanced online social experiment with strangers.
I wonder if P&G's ongoing product innovation is succeeding in spite of itself, and in doing so challenging its very definition of brands? Put a different way, maybe it makes its branding irrelevant? I mean, who needs brands when you have great products?
Now, before you write your comment waxing poetic about how I don't recognize the subtle importance of branding, I agree with you. It's important. My point is that great brand identities are built on great product functionality, and that Ogilvy was right when he said that the purpose of advertising (and marketing overall) is to identify and communicate those functions to consumers.
There are no customers of the Tide brand, no people who have relationships with it or feel some shared sense of Tide-ness. There's no Tide etched in stone in some pantheon of absolutes in the cosmos. There's "Tide 2011," not to mention "Tide This Month" and "Tide Right Now." Tide is a product that does specific things upon which its reputation, valuation, and customer preferences are continually defined.
You can add up all the make-believe value of Tide's brand -- or spend money supposedly attaching it to funny jokes, abstract concepts, or the latest darlings of frustrated marketers, charitable causes -- but there's no real value unless Tide products continually offer customers functional performance that 's better, faster, unique-er, and ideally cheaper than the ways those benefits could be realized otherwise, if at all.
Why? Because consumers know too much, believe too little, and can compare and contrast any of the claims P&G makes that aren't substantiated or grounded by its product functionality. Brand premium is no longer decided by perception of what's unreal or belief in what isn't necessarily true, but by awareness of what is true and trust in its authority.
P&G probably washes a fairly large hunk of its operational and marketing budgets down the drain thereby, but my guess is that its leadership has stayed committed to the shared principles that continue to drive innovation and marketing: come up with new product functions or new ways to apply old ones, and tell people about them. I bet tracking its last few dozen innovations through the branding labyrinth would reveal the true drivers of its sales and resulting brand value. Kind of like spotlights shining through the fog.
That's what it has that 's so important to tell the world.
I think this is where the really cool action is happening. Razors designed or packaged for that second shave before going out on a Friday night instead of a funny viral video. Deodorant spray for a touchup squirt under shirts at work vs. a symbolic donation to a worthy cause. A new odor coverup, or repurposing toothpaste to remove stains from car-door handles (or whatever).
The only qualities that are promotable and ownable are functional; everything else is color commentary to the centrality of that sport. Maybe P&G knows this, and is killing its brands every year (or more often) and then reinventing -- just like it did a long time ago?
What a new differentiator. Again.