P&G cuts digital spend by US$200 million in 2017 (and saw better reach)

During the recent Association of National Advertisers’ media conference in Orlando, P&G chief brand officer Marc Pritchard said the company has cut its digital ad spend by US$200 million last year. The amount, according to  Adweek, was invested into other areas with “media reach” such as e-commerce, audio and even television.

The move helped increase reach by 10%.

Pritchard told audience members that based on data provided by tech and media companies, it was confident in reducing digital spending to several big media companies by 20% to 50% last year.

This was largely because ads were not reaching its target audiences in an effective manner. According to Reuters, Pritchard said that with transparent viewability data in hand, the company “learned that the average view time for an ad on a mobile newsfeed is 1.7 seconds”. This pushed it to innovate.

While he did not share the names of the media companies P&G cut spend with, it is largely reported that Google faced a significant setback when the company put a halt to its advertising on YouTube after ads appeared next to questionable content. While it hasn’t come back to the platform in full force, WSJ quotes Pritchard asking people to “stay tuned.”

Over the past year, the consumer products giant has been advocating for more transparency in the digital space and called out its past marketing strategies for being wasteful. In January it made an announcement to reduce the number of agencies it is working with, and implement new agency models, in a bid to save US$400 million. It said that efforts such as reducing non-viewable ads have enabled P&G to eliminate waste and reduce losses.

Last year, it also revealed plans to reduce marketing spend by US$2 billion in the next five years. This was part of a broader US$10 billion cost reduction plan it launched one year ago, according to several media reports.