Two Seconds Is Not Enough for P&G: Pritchard Calls for 'Next Generation of Digital Ads'
Marc Pritchard sees digital media players making progress on transparency and brand-safety, but the chief brand officer of Procter & Gamble Co., the world's biggest advertiser, has an even more fundamental problem: People really don't want to watch ads, particularly in social media.
So he's pressing the biggest players to help come up with "the next generation of digital ads." In a speech to Dmexco on Wednesday, Pritchard pointed to average digital ad viewing time of 1.7 seconds, with only 20% of ads viewed more than 2 seconds. That's one reason he believes the marketing world collectively is only delivering low-single-digit sales growth despite $200 bilion in digital and $600 billion in broader marketing spending.
"Obviously we stopped wasting money on 30-second ads, and we're designing ads to work in 2 seconds," Pritchard said, according to an advance transcript. "Of course, we're negotiating to pay only for the ads people actually see. But this raises a deeper question. Looking at it through the lens of the consumer, how valuable are these ads? For example, people use social media to share things about their lives with each other. And let's face it, ads are annoying in that context."
"Bottom line, it is time for marketers and tech companies to solve the problem of annoying ads and make the ad experience better for consumers," Pritchard said at Dmexco.
It's not unlike an observation former P&G digital marketing executive Ted McConnell made almost nine years ago. Pritchard noted in an interview Monday before his Dmexco speech that P&G helped work with Facebook Chief Operating Officer Sheryl Sandberg to develop the social network's reach-and-frequency based advertising model not long after that. But hundreds of millions of dollars of spending later, Pritchard isn't content to just make 2-second ads. Instead, he's pushing Facebook, Snapchat, WeChat and others to do better.
In the interview, Pritchard said that next generation of ads is likely to revolve around utility and the concept of "mass one-to-one marketing." He points to the Pampers Rewards program finding women as soon as they start searching Google about pregnancy as an example. He also says P&G is working with Amazon and Alibaba among others to serve ads based on consumer shopping and purchase patterns.
"You can understand more about the behavior, so deliver the ad in context and when it's more useful at the right time, when it's relevant and not annoying," Pritchard says. Using better data to customize targeting is also allowing P&G to concentrate ad exposures when they're most likely to trigger sales, he says, part of a plan to reduce spending by 20% while quadrupling return on investment. That's meant to go further than a $200 million reduction in savings on programmatic buying that he described at Dmexco.
Eliminating "the long tail" of ad buys that saved money but put brands more often in front of bots or questionable content is key both to P&G's new approach programmatic approach and brand safety, Pritchard says.
The "time out" P&G took over brand safety concerns starting in March, when major advertisers were found to be inadvertently appearing next to offensive content, "caused us to look more closely at all of the content on which we advertise," Pritchard says. "There's no question ads should never be on ISIS recruiting videos. But how many cat videos should we advertise on? If you're watching cat videos, do you really want to see a toothpaste ad?"
But, he says P&G is coming back by targeting better quality. "We've joined forces with YouTube to identify their best channels to advertise on that are 100% safe and far more engaging with better content, including original content," Pritchard said in his Dmexco speech, adding that P&G is working with Facebook, Snap, Twitter and Tencent in China on a similar approach that includes more original content.
Pritchard and P&G have been a target of activist investor and Trian Partners Nelson Peltz, who heads last week accused the company of falling behind in digital media and called on it hire more outside digital talent.
On the latter, Pritchard says, "Of course. We're wide open." He points to P&G, for example, bringing in outside talent to help develop the Olay Skin Advisor artificial-intelligence skin age predictor last year.
Pritchard, who leads P&G's marketing and communication effort against Peltz's bid for the board seat in next month's vote, also says more than half of P&G's top 20 brands have gained household penetration among millennials in the past year, and noted the company's $3 billion in e-commerce sales, up 30% in the past year and bigger than its top two competitors combined.