The world's largest advertiser slashed spending on 'crappy' digital ads by over $100 million — and still saw sales increase

Marc Pritchard Proctor & Gamble

Procter & Gamble, consumer products giant that is the world's biggest advertiser, has aggressively pushed to clean up the murky digital advertising landscape — including by slashing its own spending on online ads.

But the cutback in spending did nothing to hurt sales, its chief brand officer said Thursday.

"We cut more than $100 million in wasteful spending starting last March because we couldn’t be assured ads would not appear next to bad content like a terrorist video," Marc Pritchard, P&G's chief brand officer, said at the Association of National Advertisers' Masters of Marketing Conference on Thursday. "We still delivered our sales growth objectives, proving it was smart to do."

Globally, P&G's organic sales rose 2% to $16.1 billion on a unit volume increase of 2%, accelerating over the fiscal year even as category growth slowed.The P&G brand chief also reiterated his threat to stop spending on digital media that doesn't have third-party audience measurement verified by the Media Rating Council by the end of the calendar year.

"We’re about two-thirds complete on these steps today, and should be largely finished by the end of 2017," he said, warning that the consequences are clear for those who don’t comply. "We will vote with our dollars and will not waste our money on a crappy media supply chain—so we can invest in what really matters—better advertising and innovation to drive growth."

He said the company is working with Facebook, Instagram, Snap and WeChat to create the next generation of digital ads, and also working with e-commerce 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 e-commerce business and cutting waste by 20%," he said. "But most important, it’s creating a better consumer ad experience."

Pritchard also said that the conversation was shifting from brand safety to raising the bar on "quality media content," saying that P&G was working with YouTube to identify the best channels on the platform that are 100% safe as well as Facebook, Snap, Twitter and Tencent to elevate the quality of content.

According to Pritchard, all the players in the digital media landscape, including agencies, vendors, suppliers and even the "walled gardens" were on board and committed to transforming it.

"I can't force anyone to do anything," he said while responding to a question about why the company was still investing in the walled gardens, despite there being different measurement standards and metrics across different platforms. "But I can assure you that all of our money is not going to one or more of these places and that they are stepping up."

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