Procter & Gamble, the world's largest advertising spender, made big waves last week when they announced that they were taking a shit-load of money out of "precision targeted" Facebook advertising. Their cmo said...
'We targeted too much, and we went too narrow'P&G is discovering too late what a growing number of big-time advertisers have found out -- the headlong rush into "precision targeted" display advertising has been a mess.
The age-old strategy of data-based direct marketers (which is essentially what "precision targeted" online advertising is) is proving to be a failure for brand marketers.
By 2013, P&G had moved over 1/3 of its ad dollars online.
In 2014, P&G cut ad spending by 14%. Why were they cutting ad spending? The usual delusional horseshit about online advertising:
“...effectiveness and the consumer impact of our advertising spending will be well ahead of the prior year,...an optimized media mix with more digital, mobile, search and social presence..." said their cfo.And what has been the result of all this optimized media brilliance? In the past 12 months, P&G's sales results have been a disaster, with an alarming sales drop of 8%. And when you're P&G, 8% equals 6 billion dollars.
As regular readers know, I have been warning advertisers about the bullshit they have been sold about "precision targeting" for years.
But let's be careful before we blame targeting for all the problems of display advertising.
It goes deeper than that. It's not just the targeting that's the problem for big marketers. It's the nature of the beast.
Online display advertising has evolved into electronic junk mail. If you're a direct marketer, or if you're running a short-term promotion, maybe display can be effective. But if you're a brand marketer, it's a sinkhole. Ask P&G.
P&G is not moving money out of Facebook, it is just re-arranging its Facebook investment to buy reach instead of "precision targeting."
But buying more reach is not the same as getting more impact. And from the corner office here at The Ad Contrarian Worldwide Headquarters, it still looks to us like display advertising, in any quantity and on any platform, has very little impact.
As we reported here a few weeks ago, a recent study shows that the amount of attention consumers pay to display ads is shockingly low.
There is a little voice inside me whispering that P&G is actually covering for Facebook by converting their "targeted" dollars to "reach." Something is telling me that perhaps P&G is locked in to an advertising contract with Facebook and is just doing what it can to waste less money.
It may take a few years to find out what's really going on here. Stay tuned.
And one more thing...
There's something that's bothering the shit out of me about the P&G story.
There has been a lot of bad news about ineffectiveness and fraud in online advertising in the past year. Why does it always come from research companies, news media, or clients. Why does it never come from agencies?
How can it be that the people who are supposed to be the experts never know?
Can it be that agencies really do not know what the fuck is going on in their own business and have to be told by researchers, news media, and clients? Or are they playing a double game?