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P&G trimmed $200 million in digital ad costs last year

Procter & Gamble (PG), the world’s biggest marketer, last year raised a few eyebrows after it highlighted how broken and ineffective the online advertising was. It called out the tech behemoths Facebook and Google to set right the murky digital media business and improve transparency or risk losing money from the advertiser. It even went on to calling its past efforts wasteful.

Courtesy – P&G

The FMCG giant demanded that the online ad companies provide the advertiser with viewership metrics as well as the amount spent. As part of this campaign, P&G reconsidered its marketing expenditure and said it trimmed almost $200 million in digital ad spend last year, since their ads failed to reach the target audience, making this move as a quite significant for the company. In 2017, Procter & Gamble spent $7.12 billion on advertising compared to $7.71 billion in 2011 [Data according to Statista]. Last year, between April and July, P&G that manufactures everything from personal hygiene to baby products, said it cut digital ad spending by $100 million to $140 million, stating brand safety as a major concern.

P&G chief brand officer Marc Pritchard revealed that the company preferred investing the money in areas with good media visibility like television, audio, and e-commerce.  We will still have to wait for P&G to list out the names of the media firms that have fallen under the axe. This move comes weeks after another largest consumer product company Unilever addressed the similar issue.

Will other advertisers follow the steps of these two giants – P&G and Unilever – and be more cautious of the money they spend on online marketing? But the bigger story may be the lack of any real impact from this pullback. When the company cut its spending on online ads by over $100 million, it never reported a dent in its sales that continued to increase. Will cutting $200 million have any impact on the sales? Chances are very slim.

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