Efficiency moves continue
Unlike prior quarters, P&G didn’t specifically mention savings and efficiencies in media spending or agency fees in its earnings release. But the company hasn’t run out of savings opportunities and continues to improve impact per dollar spent with a higher mix of digital spending, Schulten said during the media call.
He went into more detail when speaking to investors, saying P&G has improved effectiveness, for example, by better targeting diapering households with Pampers ads. But it’s been the opposite in fabric care, a category everybody uses, where P&G’s in-house media planning and buying has found ways to reach more people at lower cost, he said.
“The fabric care team here in the U.S. has brought media planning and buying in house, developing proprietary algorithms to better place ads,” Schulten said. “That in and of itself has allowed $65 million of savings in one year, while increasing frequency.”
Both the diapering targeting approach and the fabric care broader reach at lower cost models work, Schulten said, and P&G still has room to apply them to other categories and geographies.
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Chairman-CEO Jon Moeller repeatedly focused on how much uncertainty P&G faces, in terms of the possibility of recession, how consumers will respond to further price hikes and how well and quickly China will bounce back from its Covid outbreak. Based on its experience with its own facilities across China, P&G estimates the infection rate is “up to 80%,” Moeller told investors. “And we’re sitting here the week before Chinese New Year, when all the traveling occurs, and at the same time we have a government and a populace who desperately wants things to get better.”