Why P&G proves that precision-targeted advertising is a mess
For years now I
have been spouting off about the wrong-headedness of online ‘precision
targeting’ versus mass media. Big
brands need big reach, not the diminishing returns of finer and finer targeting.
Facebook needs to forget about ‘precision targeting’. It's just not working.
Rather, they need to sell reach.
One of the great benefits of the mass media is that
it lacks precision targeting. It reaches all the users in your
category, including the users of your competitor's brand. Have you ever
wondered how McDonald's, Coca-Cola, Nike, Toyota and Apple, and all the other
enormous worldwide brands became successful?
For one thing, these brands were sloppy; they had to be. They
didn't have big data or ‘precision targeting’. They couldn't punch a key and
immediately identify ‘left-handed Anglican drycleaners who rode tokunbo
cars’. So they had to use the mass media and talk to ‘everyone’. Not only
did they not suffer for it, they prospered from it.
What if all the 'precision targeting' we do today is mostly unnecessary
complexity masquerading as knowledge? We
are thinking like direct marketers, not brand marketers. We are ineffectually
using 'precision targeting' to try to engage the perfect individual, and by
eschewing the mass media we are harming our brand in three ways.
1. We are not reaching those within our target segment who
are not active online, or whose data we haven't mined;
2. We are not reaching the unexpected buyers, of whom
there are legions; and
3. We are not building a brand.
Mass media advertising may be ‘wasteful’ by the near-sighted standards
of digital and direct marketers. However, some wise people have pointed out that the nature of what we
call ‘waste’ may, in fact, be the very stuff that brands are built on.
Procter & Gamble Co., the biggest advertising spender in the
world, will move away from ads on Facebook that target specific consumers,
concluding that the practice has limited effectiveness. Marc
Pritchard, P&G’s Global Marketing and Brand
Building Officer, said the company has realized it took the
strategy too far. “We targeted too much, and we went too
narrow”, he said.
P&G could be the bellwether on how consumer goods companies and big
brands use digital advertising. Over the past year some marketers, specifically
consumer product companies, have discovered they need to go 'much more broad'
with their advertising.
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%. So, why were they cutting ad spending? The usual delusion 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 Marc
Pritchard.
And what has been
the result of all this optimised 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.
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.
However, 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; it still looks
like display advertising which, in any quantity and on any platform, has very
little impact. A recent study even shows that the amount of attention consumers
pay to display ads is shockingly low.
It might just be that
P&G is actually covering for Facebook by converting their
"targeted" dollars to "reach." 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.
-By Bob Hoffman, writer,
speaker and partner in Type A Group which advises
agencies, marketers, and media.
Additional reports by ‘Dele
Dele-Olukoju, a Marketing Communication strategist and publisher of
the online Marketing Communication Digest. He writes from Lagos, Nigeria.
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