How Procter & Gamble's media strategy changes the role of agencies | Canada News Media
Connect with us

Media

How Procter & Gamble’s media strategy changes the role of agencies

Published

2 years ago

 on

Procter & Gamble Co.’s efforts to expand reach through programmatic TV and digital buying and bring much of its media planning and buying in-house are fundamentally changing the role of its media agencies and how the packaged-goods giant evaluates cost-effectiveness.

Those are among key takeaways from a keynote speech by the company’s Chief Brand Officer Marc Pritchard at the Association of National Advertisers Media Conference on Thursday, based on a transcript provided before the speech and an interview with Ad Age.

While Pritchard covered some of the same areas as other recent speeches before the ANA or investors, he delved into considerably more technical detail. That includes how the company is continuously raising its goal for reach—now at 90% of targeted audiences up from an 80%-90% range in October—even as it has pulled back or restrained growth of overall ad spending.

It’s doing so, Pritchard said, through a variety of tools and strategies. Those include better programmatic buying tools and algorithms to find the custom “smart audiences” P&G develops through its first-party data and analytics; better control of how often the same people see the same ads; and more unduplicated reach through increased spending on such things as streaming networks, retail search and immersive formats, such as gaming.

Pritchard said P&G also is improving the impact and resonance of ads through AI copy testing and greater use of diverse-owned and targeted media that improves attention and impact of ads.

Among new tools Pritchard mentioned was Search AutoBidder, a proprietary tool with direct access to retailer search programs, which he said, “enables adjusting ad buying and content every 15 minutes, automatically increasing brand sales return by four times and increasing basket size for retailers.”

Related: A generative AI guide for brands

Bigger not necessarily better

P&G was the third biggest U.S. marketing spender in 2021, with an outlay of $5 billion, according to the Ad Age Datacenter, and $2.4 billion in measured ad spending per Vivvix (formerly Kantar Media).

“The current definition of the world’s largest advertiser is about who spends the most money on advertising,” Pritchard said at the opening of his ANA speech. “Celebrating a company as the largest spender implies that it’s better to spend more and more each year. We see it differently, and that it’s time for a reset. It’s not who spends the most that matters. What matters is who reaches the most consumers with the greatest media precision, the highest advertising effectiveness and the optimum efficiency to deliver sustained growth and value creation.”

P&G’s talk of getting more bang for the buck through better targeting of more cost-efficient media, of course, goes back to much earlier in the millennium, to the CEO tenures of A.G. Lafley and Bob McDonald. During that time, the company went through a series of top-line disappointments and market share erosion, said Brian Wieser, principal of the consultancy Madison and Wall and former head of global business intelligence for WPP’s GroupM.

Spending restraint, however, hasn’t appeared to hurt P&G’s growth as much lately as the company raised prices an average of 10% globally last quarter to offset cost increases that have compressed profit margins. P&G nominal sales did fall 1% globally last quarter, but rose 5% organically (excluding currency, acquisition and divestiture effects) globally, and 6% in the U.S. And the company raised its full-year sales growth guidance.

P&G’s media spending is still up substantially over a five-year period, Pritchard said in the interview. But where in the more distant past it might have used targeting tools to narrow reach to the most responsive audiences, it’s increasingly looking at using newer, better analytic tools to maximize reach to relevant audiences and potential new customers now.

“Because we’re able to reach more people precisely, it’s mass reach with precession,” he said. “It’s more efficient.”

Pampers effort boosts sales 10%

The in-house media team for Pampers helped the brand grow U.S. sales 10% last year, Pritchard said in his speech. While the diaper brand aims for only the 10% of U.S. households that have babies, Pampers is now reaching 95% of them. That’s up 20 percentage points, with brand awareness up 26 points, return on investment up 17% and 15% media savings from prior years, Pritchard said.

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.”

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.”

Beyond CPMs

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.

Source link

Related Topics:
Continue Reading

Media

Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

Published

3 weeks ago

 on

August 23, 2024

By

Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

Source link

Continue Reading

Media

Arizona man accused of social media threats to Trump is arrested

Published

3 weeks ago

 on

August 23, 2024

By

Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

Continue Reading

Media

Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

Published

3 weeks ago

 on

August 20, 2024

By

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

Continue Reading

Trending

Exit mobile version