Advertising and Marketing

At P&G, Content Is Still King

New media gains, but TV remains tops for consumer awareness 11/15/2010 12:01:00 AM Eastern

At a Glance: Procter & Gamble

Headquarters: Cincinnati

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

No company buys more TV
time than Procter & Gamble,
and it’s not a coincidence that
its brands—including Charmin, Tide,
Crest, Gillette, Old Spice, Pampers—are
among the best known in the world. Marc
Pritchard, global marketing and brand
building officer for P&G, talked to B&C
Business Editor Jon Lafayette about the
company’s investment in TV advertising
and programming.

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
jlafayette@nbmedia.com
and follow him
on Twitter:
@jlafayette


At a Glance: Procter & Gamble

Headquarters: Cincinnati

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

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