Procter & Gamble:
Marc Pritchards Warnung an die Digitalbranche im Wortlaut

While digital media matured, Moore’s Law of doubling computing power every 18 months roared along, and the rumblings of the next wave of transformation grew louder. Wherever you turn, massive databases are forming with unique consumer identities. Artificial intelligence is accelerating how brands connect with consumers. And at last, the powerful dream of mass one-to-one marketing is becoming reality.

As the world became more troubled with environmental, social and political upheaval, it was brands and companies who transformed themselves into responsible global citizens with digital technology paving the way. Social media is fueling a new era of corporate citizenship, shining the light on truth and giving brands the chance to use their voices for good.

But, perhaps the loudest alarm is that despite spending an astounding 600 billion dollar a year on marketing, our collective industries still aren’t growing enough - holding stubbornly onto low single-digit market growth. Never have so many done so much for so little.

We’ve heard these wake-up calls loudly and clearly at P&G. We are a profoundly different company than just a few years ago, transforming ourselves for the digital world. Our ambition is to be the very best at serving consumers with our portfolio of market-leading brands that offer daily-use products where performance drives purchase. We’re raising the bar on everything we do, especially on brand building, and using digital technology every step of the way.

We’re relentlessly pursuing media transparency for a clean and productive media supply chain. we’re leaping to the next disruption through mass one-toone marketing. and we’re stepping up to use our voice in advertising as a force for good and a force for growth. Today I’ll highlight some of the actions we’re taking to transform. And I’m asking you to join us – and others in the industry – to take similar actions on your businesses.

Because if we all raise the bar and transform ourselves, we can accelerate market growth, and all of us – especially consumers – will benefit.

Action 1 - we’re transforming media transparency

In 2017, the bloom came off the rose for digital media. The reason is the substantial waste in what has become a murky, non-transparent, even fraudulent digital media supply chain. According to the Association of National Advertisers, as little as 25 percent of the money we invest makes it to consumers. With 200 billion dollars in spending, it was time to stop giving digital media a pass, and insist that it "grow up." So, together with many other companies, and industry leaders such as the ANA and IAB, we’re collectively implementing five actions by the end of the calendar year to raise the bar on transparency:

• Adopt one viewability standard: so we know whether an ad has the chance to be seen
• Get third-party, accredited verification: so we know we’re getting the media reach and frequency that we paid for
• Demand transparent agency contracts: so we know what our agencies are doing with our money • Eliminate fraud: so we know humans see our ads, not robots
• Ensure brand safety: so we know our ads show up in the right environment, not in a terrorist video.

I get asked a lot, "When will these steps be complete?" The progress is encouraging. We’re about 60 percent complete today, and should be largely finished by the end of 2017, as we requested. This is a big sea change in the digital media ecosystem, and nearly everyone in the industry is doing their part. But to be clear, we all must stay diligent to get it done and keep the standards high going forward. These are common sense steps, long overdue, and necessary for a clean and productive media supply chain that frees up time and money for what really matters—better advertising and innovation.

But transparency is only the foundational step. With objective performance data, the real work begins to assess the true value of our media investments. We’ve already started, and as the fog began to clear, what we’re finding is illuminating, which is leading to raising the bar even higher.

Take viewability

Remember, this simply answers the question "does a person have the opportunity to see the ad." For too long, our brands flooded digital media with 30-second ads, treating it like another form of television. But the data now tells us that the average ad viewing time can be as low as 1.7 seconds, pretty much a blink of an eye – with only 20% of ads viewed for more than two seconds, the minimum standard. Obviously, we stopped wasting money on 30-second ads, and we’re designing ads to work in two seconds. Of course, we’re negotiating to pay only for the ads people actually see.

But this raises a deeper question.

Looking at it through the lens of the consumer, how valuable are these ads? For example, people use social media to share things about their lives with each other. And let’s face it, ads are annoying in that context; it’s no wonder they only get a fleeting glance. We can make a two-second ad work, which we do, but surely we can do better than that. So we’re working with partners like Facebook, Instagram, Snap and WeChat to innovate and create the next generation of digital ads.

Bottom line, it is time for marketers and tech companies to solve the problem of annoying ads and make the ad experience better for consumers.

Let’s move to third-party verification

Here, the question is are we getting the audience reach and frequency we paid for? Well, once digital media partners stopped grading their own homework, we found we had been reaching too few people too many times with too many ads. Excess frequency is one of the main sources of waste in the digital media industry and it really annoys consumers. It’s not surprising that ad blockers are growing 20% each year.

How many times does a person need to see a toilet paper ad to understand how it works? One way we’re attacking excess frequency is through the next generation of programmatic media. Our first time around we saved 200 million dollars over five years, mostly with cheaper ad buys, but that was looking at it through our lens. We’ve now a wake-up call pivoted to a new programmatic approach to solve a problem through the lens of the consumer; reducing annoying frequency and serving ads only when someone is receptive.

We’re also teaming up with ecommerce players, like Amazon and Alibaba, to use unique ID data to reach consumers closer to when they’re ready to buy.

This is accelerating our 3 billion dollars e-commerce business which is already growing 30 percent a year and building market share in 8 of 10 categories, and it’s cutting waste by 20 percent—improving ROI four times. More importantly, it’s creating a better experience for consumers.

What about fraud?

TAG-Certification is helping us stamp out bot fraud. This led us to stop buying media from the long tail of thousands of websites, a massive source of bots. We took the head fake that the endless supply of websites provides cheap media. Indeed it did, and proved the old adage "you get what you pay for" — in this case, bot farms. Now we work with TAG and about 200 trusted media partners that have proven they’re clean — to cut off the bot-laden long tail.

Let’s talk about brand safety

This was an unpleasant wakeup call. We’ve taken a hard line on where we advertise because we have zero tolerance for ads running on inappropriate content.

We simply will not accept or take the chance that our ads are associated with violence, bigotry or hate. In fact, we took the unprecedented step to cut more than 100 million dollar in wasteful digital spending starting last March because we couldn’t be assured that our ads would not appear next to bad content like a terrorist video. We still delivered our sales growth objectives, demonstrating that it was the smart thing to do. And we’re working with the top players who have acted responsibly to get this cleaned up.

What’s interesting is that this time out caused us to look more closely at all of the content on which we advertise. There’s no question ads should never be on an ISIS recruiting video.

But how many cat videos should we advertise on? If you’re watching cat videos, do you really want to see a toothpaste ad? So the conversation is shifting from brand safety, to raising the bar on Quality Content for Quality Placement. We’ve joined forces with YouTube to identify their best channels to advertise on that are 100% safe and far more engaging with better content, including original programming. We’re also working with Facebook, Snap, Twitter and Tencent in China using a similar approach. Others are following which will substantially elevate the quality of content for consumers to enjoy, and for brands to advertise on.

So the wake-up call on digital media has been a big one this year.

We’re working with our partners, transforming transparency to drive out waste and get better quality. We will only invest where we can prove it is safe, efficient, effective and high quality and we are innovating with our partners to move to the next generation of advertising in the digital world. It’s good for our brands, and even more important, it’s a better experience for the consumers we serve.

Action 2 - we’re unleashing the next powerful transformation of brand building - mass one-to-one marketing

For more than 100 years, brand building has been about mass, blasting messages as far and wide as possible hoping to catch someone’s attention to get them interested in buying. This led to the Wanamaker principle: "Half the money I spend on advertising is wasted; the trouble is, I don’t know which half." Now, with the advent of consumer-identifiable data, we’re finding out which half, and innovating with artificial intelligence to reach people with useful and engaging one-to-one experience on a mass scale.

Let’s take Pampers. As soon as a mom-to-be knows she’s pregnant, one of the next to know is Google when she searches about pregnancy. That sends a signal to Pampers. When we know she’s interested, we serve her information that she can use and an invitation to join the Pampers Rewards program. From there, we answer her questions during pregnancy based on our AI-enabled engagement system. At birth, baby’s first diaper in the hospital is Pampers. On Mother’s Day, we serve mom a touching tribute and points for purchase. On Father’s day, we serve mom and dad something endearing like this (Video: "Pampers Dad"). From pregnancy to the day her baby leaves diapers, Pampers is there for mom and dad, when and where they want, with useful and enjoyable oneto- one experiences.

Oral-B Geniusis another example, featuring a built-in sensor to help people get the best dental health experience. Believe it or not, cavities are still the #1 preventable disease in the world, and gum disease isn’t far behind. A big reason is people don’t know how to brush their teeth correctly. They brush an average of 43 seconds versus the recommended two minutes. If you’re left-handed, you brush more on your right side.

Almost everyone brushes way too hard, eroding gums and causing sensitive teeth. Oral B Genius solves these problems by showing you how to brush with real-time visuals and signals. With Genius, the average brush time is two minutes and fifteen seconds, and a red light blinks when you brush too hard so you can save your gums. It’s an individualized and personalized daily dental assistant that also sends a data signal to the folks at Oral-B when it’s time for refills, serving a coupon to you when you’re most receptive. We have many more examples such as Olay Skin Advisor, the SKII Beauty Consultant, and experiments from a vast network of start-up partners too numerous to list. And right here at Dmexco, P&G is looking for new partners from the Hatch Start-up Village competition we’re sponsoring.

We’ve unleashed fast-cycle teams across the Company to innovate and usher in this next wave of disruption.

We’re on our way to the next frontier of mass one-to-one marketing, and we’re open for business so bring us your best ideas and bring us your best talent.

Action 3 - we’re using the power of digital technology to use our voice in advertising for good, transforming brands and companies into responsible citizens

Today, people want to know more about brands, what they believe in, and the people and companies behind them. They want to know about the brand’s track record on environmental sustainability, diversity and inclusion, and ethics.The disruption of communications through social media, online video, and viral sharing is enabling brands and companies to not only do well, but to do good. (Video with examples of advertising from several brands in different industries and in multiple countries). What do they have in common? It touches hearts and opens minds. Some of it is beautiful, touching, provocative. All of it is creative, and responsible – promoting something that matters.

These are companies and brands using their voices in advertising to take a stand and promote gender equality.

Why gender equality?

The obvious reason is that women are half the world’s population, its common sense that there should be complete equality. The norm should be equal representation between women and men, with equal voices, equal pay, and equal respect. But the reality is, it isn’t equal.

The World Economic Forum’s 2016 report indicates that closing the gender gap in health and education has stalled, and that the economic gap has fallen back to 2008 levels. That means: Women and girls receive less health care than men. Girls drop out of school at a greater rate than boys. And women receive half as many STEM degrees as men. Which leads to economic gaps: When they reach working age, 8 of 10 men work in paid jobs versus only 5 in 10 women. Girls spend 30 percent more of their time than boys in jobs that pay nothing – zero. And there is the outrageous fact that women are paid 20 percent less than men for the same job.

All of this is unfair. But imagine what an equal world would be like. The economic impact of equal pay for equal work in the U.S. alone is worth 840 billion dollar in wages and additional purchasing power. McKinsey estimates that full economic equality would add 28 trillion dollar to the world economy. In other words, equality is not only a force for good, it’s a force for growth.

One of the important steps we’re taking is to use our reach and voice in advertising to promote gender equality. And digital technology is the catalyst for enabling us to express our point of view more effectively and more broadly. 

Online video has given us the freedom to tell more compelling stories and convey important messages that couldn’t be done in a 30-second ad. Social media connects our stories and messages to others, and shines the light on truth and transparency like never before. P&G’s reach as the world’s largest advertiser gives us both the opportunity and the responsibility to use our voice for stepping up on important matters such as gender bias.

By doing so, and leveraging the power of digital media, we can promote conversations, influence attitudes, and change behavior to help make our world a better place. By the way, as mentioned earlier, when the world is more equal, it leads to more growth. In fact, we’ve found that advertising that is more gender equal—in representation, roles, speaking parts, or points of view—performs better in driving growth and changing attitudes.

Take Always. Three years ago the brand committed to raise the creative bar and make a difference in the world. They discovered an outrageous fact that 50 percent of girls have a significant drop in confidence at puberty, for many reasons, including the use of demeaning phrases such as "like a girl" which was used as an insult. The Always team set an ambition to change the meaning of “like a girl” to mean amazing things. (Video: Original "#LikeAGirl") They could have stopped there, but they didn’t. Always took on the outrageous fact that emojis 6 are biased, and that half of young girls quit sports at a time when they need it most. And now, the fact that too many girls at puberty have a paralyzing fear of failure.

(Video: "Keep Going #LikeAGirl")It’s striking that this is the 6th iteration of #LikeAGirl, and despite limited paid media, it continues to have worldwide impact due to the power of social media, online video and the massive conversation it inspires. 550 million views and 25 billion PR impressions later, Always has been building awareness and market share for three consecutive years, and attitudes are changing. 76 percent view #LikeAGirl as a positive expression versus 19 percent before. That’s the transformational power digital technology has given brands—the power to use their voice in advertising as a force for good and a force for growth. Let’s go one step further. Imagine if all brands and companies used this enormous power for good? Bias would shift. Attitudes would change. Action would be taken.

Economic empowerment would drive market growth. But even as the world’s largest advertiser, P&G is still only 2 percent of total advertising spending. What if the other 98 percent did the same? That’s why we’ve joined forces with other companies to collaborate for good – collectively shining a light on the problems, the opportunities and the solutions. We’ve joined:

• The Catalyst CEO Champions for Change and the CEO Action to share best practices on improving gender equality and diversity and inclusion. 
• The ANA #SeeHer movement and the UN Women Unstereotype Alliance to eliminate gender stereotypes in advertising.
• And the UN Women Study on Gender Attitudes, to measure progress in 40 countries for the next decade.

These efforts are inspiring hundreds of companies to act together and holding us all accountable for making progress. There is no room for selfishness when it comes to the greater good. We will all vigorously compete on the basis of innovation and creativity, but we’ve united behind a common brief to “use our voices in advertising for good.” That’s why at P&G, we invite everyone to join forces for an equal and better world. (Video: “We See Equal”)

2017 isn’t over yet, but it’s sounded several wake-up calls for the marketing world. I’ll close on a call to action—let’s accelerate the next transformation of brand building:

• Complete the media transparency interventions: these are foundational steps, necessary for a clean and productive digital media supply chain to cut waste and invest in better consumer experiences.
• Accelerate the next wave of disruption, mass one-to-one marketing: it’s the future, and the more we all innovate, the better it will get for the consumers we serve.
• Use your voice in advertising as a force for good on important issues such as gender equality: it is brands and companies who are now the key leaders for social responsibility.

We are at an important turning point. We’re completing the first wave of transformation for digital media, and at the starting line for the next big brand building transformation. Let’s unleash our tremendous innovative power to create better experiences for the consumers we serve, usher in the greater good for the communities in which we live, and drive growth for the markets in which we operate. I’m looking forward to accelerating the momentum on this amazing journey with all of you. Thank you.