Ad Age Digital A-List: P&G
Old Spice's "responses" campaign of more than 200 rapid-fire videos syndicated through social-media heavyweights last July generated more than 2 billion media impressions and gave Procter & Gamble Co. its greatest exposure as a digital player.
But while Isaiah Mustafa may be emblematic of P&G's muscle flexing in digital media, he's really only the flashiest part of a stepped-up digital-marketing effort over the past couple of years under Chairman-CEO Bob McDonald and Global Brand-Building Officer Marc Pritchard. Ultimately, they hope the man your man could smell like is a milestone on the road from mass marketer to fully digitized one-on-one marketer.
That path really began when P&G heralded the era of interactive marketing with former Chairman-CEO Ed Artzt's 1994 speech and the Future of Advertising Stakeholders (FAST) conference in 1998. But now the bigger news in digital for P&G seems to lie in the future, not the past -- something that looked doubtful only a couple of years ago.
Though P&G never walked away from digital marketing, it was keeping the investment alive during the last decade largely via online-relationship programs and brand websites. But amid the dot-com-bubble burst and a crisis of its own, P&G in 2000 renewed its focus on what Chairman-CEO A.G. Lafley termed "proven media," largely TV and print.
Fast forward to 2009, when Mr. McDonald took over, and P&G was again struggling -- not nearly like nine years earlier, but trailing most rivals on the top line. Mr. McDonald made digital marketing part of his solution, adding a billion new consumers by 2015 by all means available, including e-commerce.
True, P&G spent only 5% of its $3.2 billion in measured media last year on the internet, according to Kantar Media. But people familiar with P&G peg that spending in the double digits in the U.S., and possibly as high as 20%.
Third-party tracking misses all or much of the spending in some of the biggest, hottest sectors -- including search, video, behavioral targeting, amd mobile -- while sometimes overestimating other media. But even at 5%, P&G has reached a level where its return-on-investment tool of choice -- marketing-mix modeling -- generally can read sales impact from digital spending.
And a handful of smaller P&G brands, including Pepto-Bismol, Braun and Aussie, now have digital media as the biggest piece of their marketing plans, Mr. Pritchard said, a big change from the days when TV almost always ranked first even for small brands. Even bigger brands like Secret now have products, such as Clinical Strength, with a consumer base best reached through digital, said Lucas Watson, global team leader for digital-business strategy at P&G.
Mr. McDonald, a certified electrical engineer who once wrote an assembly program for the West Point computer system in the 1970s, clearly has made digital marketing, like digital everything, a high priority. "We're going to be the most digitized company in the world," he said in an interview last month.
"The eventuality of the world," he said, "is a one-on-one relationship with every consumer [which] results in trust, loyalty?all the things that a brand wants. So the first company in the world that's able to create that one-on-one relationship with the consumer by definition will win."
Of course, Mr. Mustafa and Old Spice agency Wieden & Kennedy got worn out at around 200 individualized videos. That falls well short of the world's estimated 7 billion population or the 5 billion slice P&G seeks. But Mr. McDonald does have a plan for the rest, if still sketchy at this point, and it involves meeting the expectation created by one-to-one marketing "that you can customize your product for the person."
P&G in fact had such a mass-customization effort a decade ago -- beauty marketer/retailer Reflect.com, launched in 1999 and shuttered in 2005. "One could argue A.G. was ahead of his time" on Reflect, Mr. McDonald said. "But there are degrees of customization we can do today."
It's mostly by retail channel now, he said, but he sees that as the fat end of a funnel that eventually leads to Reflect-style mass customization.
Also to that end of individual relationships, P&G is working to keep its lead on most competitors in online relationship programs, having compiled email and website-based programs behind such brands as Pampers and Home Made Simple with membership in the millions.
Last year P&G invested heavily in Facebook marketing to plant relationship programs inside the internet's biggest walled garden. It now has at least 15 brands with six-figure Facebook followings, and two -- Pringles and Old Spice -- with 9 million and 1.3 million, respectively.
While for P&G and many marketers, 2010 was the year of acquiring Facebook fans, 2011 and beyond are for figuring out what to do with them.
Mr. Watson and Mr. Pritchard see Facebook as a supplement to the company's existing online-relationship programs, not a replacement. And while it's become fashionable among digerati to say Facebook fan counts don't matter and don't guarantee engagement, they sure don't hurt.
Take Secret deodorant, with more than 775,000 "likers." Earlier this month, the brand looked to engage them with "Mean Girls Stink," an anti-bullying Facebook app from IMC2, Dallas, that, among other things, lets users analyze their own updates for meanness and write kind graffiti on the walls of friends. In less than two weeks, the app had been downloaded more than 250,000 times and had nearly 80,000 likes of its own, fueled by substantial blog coverage in addition to Secret's fan base.
P&G also has been using its Facebook pages for e-commerce, led by Resource Interactive, Columbus, Ohio, and Pampers, which anchors the effort, fulfilled by Amazon. It's one of a growing number of initiatives P&G has undertaken in the past year to fuel growth in an e-commerce channel it had put mostly sporadic effort behind in the prior decade, after a first wave of e-commerce efforts met with disappointing results.
P&G last year also opened its own e-store last year, which got more than 150,000 visitors last month, per Compete, and stepped up efforts across many other sites linked to click-to-buy buttons on most brand websites. The company still gets less than 1% of sales from e-commerce, but Mr. Watson points to the fact that Amazon, thanks in part to its acquisition of Diapers.com owner Quidsi, now ranks among the top 10 retailers for Pampers -- an e-commerce staple that gives the company a platform for growing online sales of other brands.
Digital marketing and e-commerce are increasingly integrated at P&G. The e-business unit Mr. Watson leads reports both to Mr. Pritchard and Alex Tosolini, former head of North American laundry who became P&G's first VP of e-commerce last year.
Not everything's gone P&G's way in digital and social media, of course. Witness the revolt among around 11,000 Facebook users over Pampers Dry Max diapers led to much broader mass-media coverage last year. But digital was also part of the solution. The brand bought search ads against the terms "Pampers and rash" to highlight the Consumer Product Safety Commission finding no link between the diapers and rashes and embedded videos of R&D executive Kerri Hailey into product displays at Amazon and other e-tailers.
"The bottom line is that we have extended digital marketing to multiple brands around the world," Mr. Pritchard said. "People have caught onto the digital wave and are making it an integral part of brand building."