P&G’s New Digital Ad Strategy Only Works For Them

P&G’s New Digital Ad Strategy Only Works For Them

This piece originally appeared in VentureBeat on August 15, 2016.

By Charlie Rybak

If you want lessons on digital advertising, don’t take them from a company you have nothing in common with.

The advertising and tech worlds suffered a collective cranial explosion early this week after P&G announced that they were pulling back on some of the more targeted Facebook ads they’ve been running to consumers.

Before examining the merits of what they’re doing, it’s important to think about what P&G is – a multinational conglomerate of household consumer packaged goods companies like Tide, Febreze, Charmin, Downy, Bounce, and so on. Are your clothes, teeth, hair, face, or dishes clean? If you answered yes to any (or hopefully all) of those options, there’s a pretty good chance you’re a Procter and Gamble customer.

More importantly, P&G is the biggest advertiser on the planet. P&G spent $4.6 billion on advertising last year, which is $900 million more than the next largest advertiser, and more than twice as much as all but six other companies. Calling them a “bellwether”, like the Wall Street Journal did in their piece, is like using Michael Phelps’ times to judge a high school swim team.

Don’t get me wrong – what P&G is doing is really smart, if you’re P&G. If you run ads with broader targeting, you’re able to bid on more impressions, which pushes your costs down. Instead of targeting 20 million people and splitting your ads into 1,000 individual campaigns with small universes, you can be more efficient by targeting them as a collective with a general message. Let’s say each of the 20 million people visit five Facebook pages per day. Instead of bidding on each of the impressions as part of many different smaller audiences, you can bid on them collectively – but only if you’re willing to give them the same messaging and ad copy. Companies that have a consumer base wide enough to pull this off can, and should, do this. But those companies are few and far between.

Quick quiz – you’ve seen hundreds of Tide ads. Why does Tide tell you to buy their soap, instead of someone else’s soap? You probably can’t come up with anything – and that’s the beauty of Tide’s advertising strategy. Tide doesn’t need a message that’s more complex than “We are laundry soap available in the store you shop at” because they don’t really have a competitive advantage outside of that. Charmin is a toiler paper company whose commercials feature a bear that seems to have an incredibly high fiber diet. Head & Shoulders used Troy Polamalu, who has really long hair, to tell people that they’re a shampoo company. Why did they tell you to buy Head & Shoulders? Because a guy who’s really good at football and has long hair uses the same product. Huh? They get the biggest, baddest megaphone on the planet, turn the speakers all the way up, and scream their product names at the top of their lungs until you beg for mercy and grab the closest green, blue, or purple bottle of P&G product you can find in Aisle 8.

Another silly quote from the Wall Street Journal story focused on broad vs. targeted advertising: “Mr. Douglas said case studies show that companies can receive a bigger sales increase if they reach a more significant portion of a platform’s overall audience.” Of course! Is this a surprise to anyone? This is like saying that running a Super Bowl ad generates more sales than running an ad on a rerun of Cops at 4 AM. Most companies can’t afford millions of ad impressions that hit people who have never and will never buy their product, and most companies shouldn’t be following P&G’s lead when they say that’s where they’re headed. Thanks to digital platforms with broad reach like Facebook, ad targeting that relies on purchase history and user behavior is better than ever before, and any smart company will acknowledge that and use it to their advantage.

One of P&G’s largest brands, Gillette, is clearly feeling the heat from competitors who have utilized digital targeting more effectively than they have. Dollar Shave Club, which just sold for $1 billion to P&G competitor Unilever, and Harry’s Razors, which just forged a powerful partnership with Target, have stolen considerable market share from Gillette over the past couple of years, powered by targeted ad campaigns that included hundreds of thousands of dollars in direct site buys. And Bevel has used hypertargeted ads, influencer outreach, and advertising on niche podcasts like Tax Season, and has been so effective that P&G filed an unsuccessful complaint against them with the Council of Better Business Bureaus. They’ve been able to do this because they have a better product and better message for African-Americans.

P&G can afford to target everyone, or close to everyone. Most companies cannot. Targeting matters, and unless you have an eight figure ad budget, you’re crazy not to use all of the tools Facebook offers.

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