First-party data has been one key to that, he said. “For example, when parents learn they’re pregnant and go online to search to determine when the baby is due, Pampers Due Date Calculator is served to help. Pampers provides additional content such as the Baby Name Generator, surveys about baby development, and augmented reality bedtime storytelling. Pampers asks parents to join the Pampers Club to receive other relevant information and rewards for purchasing diapers.” Pampers Club now can “engage directly with 50% of all parents with babies in diapers,” he said.
The first-party data and other sources help the Pampers media team create “smart audiences” reached through programmatic digital media that avoids excess frequency, Pritchard said.
Pampers tests ads using P&G’s AI Studios proprietary testing, which he described as “a neural data network comprised of decades of consumer reactions to advertising.” The artificial intelligence system copy tests ads in one day for $1,000 vs. 30 days and $30,000 needed to run a conventional survey-based copy test, he said. “This fast-cycle testing allows the Pampers creative team to optimize more than 140 different ads a year for different platforms—including digital media, TikTok, YouTube, Pinterest, Instagram, e-commerce, streaming TV and broadcast TV.”
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New role for media agencies
All that happens largely without media agencies.
Increasingly, P&G does media planning in-house. Much of its digital buying with big players such as Meta and Google is done by P&G marketers using self-service tools as part of Pritchard’s “hands on the keyboard” mantra. The company’s growing investment in CTV comes largely through programmatic buys handled by The Trade Desk. And its growing retail search business, which Pritchard in November said has risen to 11% of P&G ad spending, increasingly is handled through its automated system.
“Tide was one of the first brands to bring media in-house,” Pritchard said in his speech. “In broadcast TV, they received program and network viewing data previously available only to agencies. They converted the data into a planning algorithm that analyzes and chooses where to place ads across 120 networks and thousands of program combinations to maximize reach at lower cost. Then, they developed a scheduling algorithm to optimize the allocation of ads within programs across weeks, days and hours—increasing reach with the same number of ad units and saving $65 million dollars. They’re now using an algorithm to test a new way to buy ads spread evenly across all TV programs and channels, which should increase reach another 3 points and save another $40 million.”
Such moves haven’t eliminated media agencies, but it has changed their role, Pritchard said.
“More than ever, we need agency partners to see around corners and innovate in areas such as measurement, stewardship, content development, artificial intelligence, immersive experiences, multicultural media ecosystem development, media supply chain efficiency, and the future of media and advertising,” he said. “We’re finding that we can do more work in-house productively and we can strengthen agency partnerships at the same time to create even more value.”
Dentsu’s Carat and Omnicom’s Hearts & Science are P&G's media agencies in North America.
“Over the past few years, Omnicom Media Group and Hearts & Science have created new service models and a suite of specialized capabilities that help clients with in-housing ambitions,” said Hearts & Science CEO Chris Stanger in an email statement. “We’ve been at the forefront of this shift and many of our clients leverage our capabilities to augment gaps in their own solutions as they progress along their maturity curve. Examples include our end-to-end marketing orchestration platform (Omni), enhanced commerce and supply-chain capabilities (Transact), full-service deployment of the Google Marketing Platform (TRKKN), and a host of advanced digital, personalization, and measurement capabilities. As our clients explore new service models, we’ll continue to build and refine the capabilities that accelerate their growth.”
Dentsu did not immediately return a request for comment.
“Years ago, when agencies started saying ‘We can aggregate data and start to create audiences to do better targeting,' that was great,” Pritchard said in an interview. “But over time, that’s what we can do now.” So he said he's asking agencies, “'What’s next?' And that will change the role of agencies, particularly major media agencies. It will still be a partnership, just different.”
Among other things, he said, “We had an agency recently come to us saying, ‘Look, we’re thinking about how we can help you build out Black-owned and Hispanic- and Asian-owned media content.”
While P&G brands are reaching more of their target audiences often at less cost, that doesn’t necessarily mean lower cost per thousand. The savings often come from eliminating excess ad frequency, and increasing unduplicated reach, by definition, means reaching harder-to-reach audiences, which can come at added costs.
For example, reaching a Black audience with “resonant media” is going to have a higher sales lift that justifies a higher CPM, Pritchard said in the interview. “That’s where the future is,” he said, and one area where he’d like to see agencies contribute is “help us figure out how to do that and the whole measurement ecosystem as opposed to just one particular way” of measuring.