This was a remarkable week in adland.
Proctor & Gamble made an announcement that shook up the ad world. P&G is the world's largest advertiser. Advertising is the oxygen they live on. P&G's announcement may finally put to rest one of the most pervasive and harmful fantasies the industry has ever embraced.
The Wall Street Journal:
"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 chief marketing officer, said the company has realized it took the strategy too far. 'We targeted too much, and we went too narrow'
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 "
We have been warning advertisers for years
about "precision targeting." Almost 10 years ago we wrote...
" ...as long as there are masses, and as long as there is marketing, there will be mass marketing. Not only are we not “at the end of the era of mass marketing,” we are in an explosion of media that, in the fullness of time, is going to make those media that can economically reach mass markets more valuable than ever."
But for years the online ad industry has been hustling gullible advertisers with the pitch that "precision targeted" advertising is much more effective than mass reach. As I wrote in this space earlier this year...
"So far this has been a spectacular failure. Each of us is currently inundated with dozens, if not hundreds, of online messages a day -- banner ads, emails, social messages, etc -- that are assumed by marketers to be particularly relevant to us and reflective of our individual purchasing needs and behaviors. We pay almost no attention to any of them. They are essentially invisible."
When the world's largest advertiser - who won't tie their shoes without researching the effect on sales - calls bullshit, you know something's up.
Here's what's up.
By 2013, P&G had moved over 1/3 of its ad dollars online, "...digital is incredibly effective, and we're doing more,"
said P&G's ceo.
In 2014, P&G cut traditional ad spending by 14%. Why were they cutting ad spending? According to their CFO...
“...effectiveness ...will be well ahead of the prior year...an optimized media mix with more digital, mobile, search and social presence..."
And what has been the result of all this optimized media brilliance?
In the past 12 months, P&G's sales results have been shocking. They have dropped an alarming 8%. Their annual sales are over 75 billion dollars. That means their sales dropped by about
6 billion dollars.
If P&G alone have lost $6 billion in sales this year, how much has "precision targeting" damaged the thousands of other companies who have been duped by this delusion?
I hate to say 'I told you so'...wait a minute. No I don't.