The largest advertiser in the US, P&G, made a lot of waves early this year when their chief brand officer, Marc Prichard, made some very negative comments about the digital ad industry. He had major concerns about the lack of transparency and problems with the supply chain. According to information included in P&G’s most recent quarterly earnings report, it is quite clear that P&G wasn’t just talking about problems, they took action to protect themselves.
Specifically, they drastically cut the number of sites that they had ads placed on. In January, they reduced the total number of sites where their ads appeared by 64% YoY. The cuts continued throughout the year with the most notable reductions coming in April, where they had a 69% cut. Starting in July, however, they seem to have reversed that trend.
In July, the number of sites went up by 14% YoY, and in August it went up by 21%. One has to wonder exactly what changed that caused them to reverse course, especially since they commented that the reduction in digital ad spend didn’t negatively impact their profits.
Most people think that the change is an indication that they have found ways to improve the quality of the ads they are purchasing. We know that for YouTube, they cut all ads there for a short time, and then returned with an agreement that their ads would only be published near preferred content producers.
The CEO and co-founder of MediaRadar (where the compiled numbers came from), Todd Krizelman, said, “P&G has gained more transparency over its campaigns, which has resulted in a bounce back. They’re the biggest advertiser in the US and one of the biggest in the world. If they want more transparency, agencies, vendors and publishers are going to deliver it. Because of this, media partners have been compelled to install more brand safety measures in an effort to retain and win new business from P&G.”
While P&G didn’t call out YouTube, the subject of many marketers’ ire earlier this year, in its fiscal fourth-quarter earnings release, but did say digital ad spending fell because of choices to “temporarily restrict spending in digital forums where our ads were not being placed according to our standards and specifications.”
eople familiar with the matter said P&G left YouTube in March over brand-safety issues, though P&G has also had problems with ads appearing on video content that didn’t match its goals. It’s unclear whether or to what extent the digital cuts came from other venues, though Chief Financial Officer Jon Moeller in a media call also noted Chief Brand Officer Marc Pritchard’s broader efforts to eliminate “a significant amount of waste” in the digital media supply chain.
When the comments were made back in January, many people wondered if P&G was going to be able to force significant change in the industry. While there is a long way to go overall, it is clear that P&G is getting what they wanted. While the average marketer isn’t going to have the same level of pull, everyone will benefit from the changes that P&G is forcing.