Those of you who follow this blog and my writing won’t be surprised by statements this week from the CEO of advertising behemoth Proctor & Gamble, Bob McDonald. Here’s the important line by that’s being quoted by Jeremiah Owyang and others:
“In the digital space, with things like Facebook and Google and others, we find that return on investment of the advertising when properly designed, when the big idea is there, can be much more efficient.”
P&G announced it was laying off 1,600 people, including some in marketing, which will result in $240 million in annual savings, but it’s the consequences of McDonald’s statement that has most people concerned. Ad Age:
He (McDonald) cited the 1.8 billion in free impressions generated by the Old Spice campaign in recent years, adding “there are many other examples I can cite from all over the world.”
Jeremiah Oywang wrote that the marketing industry should see this as a bellwether event indicating that digital marketing will:
- See an increase in spend in overall digital marketing.
- Makes marketing accountable, through analytics and tracking.
- Will need to integrate paid, owned, and earned.
Jeremy Epstein wrote that the history of social media, when it’s written, will view this week as a watershed moment, and I agree with him. The idea of “spend more on advertising to generate more sales” no longer works, he wrote.
There is probably NO company in America (maybe even the world) that rode the wave of mass, traditional advertising to behemoth status more than P&G. It’s as iconic a marketing org as there is and this week will be recognized as the one where the balance of power finally-and forever-shifted.
Media companies, who make their money via advertising adjacent to or interrupting their content, will ultimately be the ones who feel the pain of all of this, because the net allows companies like P&G to function in the role of media company all my themselves. Where they do still advertise, they can do so with confidence in the effectiveness of their spend, and the blue smoke and mirrors of mass marketing simply cannot compete with hard network data.
This is why you’ll hear me repeat over and over again that content isn’t the problem for media companies. The problem is what’s taking place in the advertising world, and no content solution will fix it.