At P&G, Content Is Still King
New media gains, but TV remains tops for consumer awareness
By Jon Lafayette -- Broadcasting & Cable, 11/15/2010 12:00:00 AM
Net sales: $78.9 billion*
Net earnings: $12.7 billion*
Global employees: 127,000*
Advertising costs: $8.576 billion*
U.S. TV ad spending: $1.582 billion (2009)**
U.S. TV ad spending: $861 million (Jan.-June 2010)**
*FY ended 6/10
**Source: Kantar Media
Beyond buying ad time, P&G has been a big producer of content. Why?
The reason why we are so interested in entertainment that is appropriate for families and content that brings families together is that we’ve found through research—and this is through the Alliance for Family Entertainment, along with the Association of National Advertisers— that brands are really judged by the company they keep. And when they’re in content that is appropriate for the entire family, then what happens is the favorability ratings of our brands go up significantly and the purchase intent goes up significantly. And we’ve found just the opposite in shows that may be less or not appropriate at all for the whole family viewing things together. We also saw the same thing with the Olympics. When the Olympics ran, our advertising was between 30 and 37% more memorable and effective than in non-Olympic advertising, because people are engaged.
Does a focus on family entertainment work with male-oriented products like Gillette?
Interestingly enough, this is why we have good relationships with networks like ESPN, because sports are very family-friendly. People come together to watch sports. And so that’s one of the reasons why. And the other thing on this family-friendly point, it was not just moms that were saying they needed more shows that were appropriate. It was dads too. So, Gillette, Head & Shoulders, Old Spice, all of those would definitely work in those kinds of shows. We run in a range of shows, we don’t run in just family entertainment. We do want to run a wide gamut—it’s just what we were looking for is more options.
TV is changing and the ad world is changing. Is TV as powerful and important to you guys as it used to be? Does TV still give you enough bang for your buck compared to the new digital alternatives?
TV’s faring quite well. Anyone who [touted] the demise of TV was quite premature. If anything, what TV is doing is shifting and innovating. And even if you look at the digital world, one of the things that is pretty fascinating is there’s a fairly heavy multitasking going on. People watching TV are also on the Internet and texting and so forth. That actually provides an opportunity, because if you can get some simultaneous or even somewhat different content going at the same time, you see a bigger boost in engagement on your brands.
TV advertising prices keep going up. At what point does TV stop being efficient as a sales medium?
What we try to do with that is rather than looking at just TV, we look at all the marketing mix elements and we try to find where [it is] that you hit that point of diminishing returns. What I think is interesting about all the different media vehicles is that you now have more choices in terms of being able to engage people, but if you want broad-scale awareness you still go with TV. If you want to have a more interactive and one-to-one relationship with consumers, then you go into social media. If you want to just stay always on so people can find you, that’s where you use search.
We came off an upfront where people said, ‘I’m getting sick and tired of spending more for less.’ You don’t agree with that view?
Every year, let’s face it, we always go through the same dance because that’s the beauty of the free-market economy. And what it requires every year is we’ve got to be more innovative about the mix of media vehicles and the networks that we work with, and the content. So what’s happening is year after year we get just a little bit more precise in terms of how we can make sure we get the most out of every dollar we spend. When prices go up and when prices change, that’s really what starts to force people into thinking of different ways.
What's the goal of your investment in the ‘Family Movie Night' with Wal-Mart?
First of all, what we do is invest in producing the film, so that's one investment we make. The other thing we do is we not only run our normal ads, we also co-create advertising, kind of an innovative almost mini soap opera series of Wal-Mart and P&G brands that come together. What the show then does is it does provide an environment for our brand. And as I've said we've seen the research play out significantly in terms of favorability and purchase intent.
The other thing we do though is that we run merchandising in the store. So at Wal-Mart, what Wal-Mart will do is run a major merchandising and feature event. During the show they not only promote our brands, they also promote some other non-competing brands, and promote the DVD sales. So what that does is generate extra sales, so yeah, for the investment we make, it more than pays out and builds our business, so it's kind of a win-win-win.
Our consumers get programming that they like and they can watch with their family. Our ads, the images of our brands and the reputations of our brands and equities are built. And we generate more sales. And so does Wal-Mart.
How involved does the company get in picking the scripts?
We get [involved], not only with the Wal-Mart ‘Family Night,' we get a lot of scripts that are sent to us. And we vet them and we've got an entertainment group that looks at things, and so we do select. We don't write them. That's not really our bag. But we do make sure we can assess to ensure that it looks like it's going to be a good show and make sure it's appropriate. And we let creatives and directors and producers do the work that they do best.
P&G signed a deal with the Oprah Winfrey Network. What goes into a decision like that?
Well, it's a little bit like some of the other networks that have started up. Lifetime was a good example, Discovery was another example. What we like to do is look at when a network is going to start up and put content out that we think fits with environments that our brands would really be good to be seen in, and where we think we can actually do some co-production or co-content creation; then we're more than willing to go ahead and put our money in there and invest with them. Given the incredible success that Oprah Winfrey has had in so many things, we think that this is definitely one that will have a lot of positive effect. What we love about what she does is her whole focus on making people's lives better is very consistent with our purpose of touching and improving the lives of the world's consumers, so we think this is going to be a very great partnership. We already are a very big advertiser on her show as well as in her magazine. We think the network will make a lot of sense for us.
Are there shows and channels that P&G won't advertise on, and why?
For competitive reasons, we don't disclose our advertising guidelines. However, I can share that we want our brand messages to appear where our consumers are spending their times and are most receptive to our messages. Many of our brands are loved and trusted by moms and families, so much of our advertising is placed within those contexts.
Most of P&G's ads focus on product attributes, but some have created iconic characters, such as Mr. Whipple for Charmin. Is there value in such long-lasting icons?
One principle we follow in our advertising is to have brand assets that are instantly recognizable and flexible enough to use across multiple mediums. Sometimes a brand asset can be a memorable character such as Mr. Whipple who was used during the long-running Charmin campaign to communicate the brand benefit of "squeezably soft," or Rosie, who helped make Bounty known as the quicker picker-upper, and Mr. Clean who is still an icon of the brand today.
The value of having a Mr. Whipple, Rosie and Mr. Clean is that you could build relationships with people over time that could easily speak to the benefits of our products and build brand equity. This is still a practice many of our brands use today.
E-mail comments to firstname.lastname@example.org and follow him on Twitter: @jlafayette
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