Here’s a link to a really good article from Business Insider about P&G recognizing that social media is free and how they are reacting to it.
Now, if you’re in the agency business this is a bad story because P&G is talking about laying off people who are working on paid media.
However, if you’re a brand manager you should take note that the traditional way of thinking about advertising is rapidly changing and if you change with it, you can save a lot of money.
From the article:
P&G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise. More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P&G’s ad budget forever, regardless of what happens to its sales.
He told Wall Street analysts that he would have to “moderate” his ad budget because Facebook and Google can be “more efficient” than the traditional media that usually eats the lion’s share of P&G’s ad budget.
We see our client’s reacting in much the same way as they are adding more and more ways to help local retailers advertise online beyond paid media in their marketing portals.
From the same article P&G’s CEO Robert McDonald says,
In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient. One example is our Old Spice campaign, where we had 1.8 billion free impressions and there are many other examples I can cite from all over the world. So while there may be pressure on advertising, particularly in the United States, for example, during the year of a presidential election, there are mitigating factors like the plethora of media available.
We think the logic that P&G is using works even better for local advertising where retailers need to watch every penny. Now it’s time to think more about online media, especially social. Another big advantage besides FREE media is that digital is much easier to change, control and monitor. If you’re spending a lot of money on co-op administration, imagine how much you can save if every item is pre-approved and automatically tracked.
Change is good.