Proctor & Gamble's digital advertising strategy and brand equity

P&G Branding Strategy and Advertising

Recently installed Proctor & Gamble (P&G) CEO Bob McDonald spoke to shareholders recently and articulated the vision of the company, "to touch and improve lives" (Leader's Interviews. N.D.). In this context the indefatigable CEO has set out a bold initiative of adding one billion consumers of its products within five years, adding to the existing four billion customers who already are P&G customers (Sewell, D. March 6, 2010). Accomplishing this goal however, requires a carefully crafted mix of marketing strategy which allows for reaching a differential of customers across demographic variances including: socioeconomic, age, technological awareness, and geography. McDonald, points to the "hundreds of millions of people who have yet to buy their first bottle of Tide, their first Pampers diaper or a Gillette shaver" (Sewell, D. March 6, 2010). In implementing this global strategy of reaching existing and new consumers, P&G utilizes a diverse range of advertising and marketing options which in the last year accounted for nine billion dollars of corporate spend (Sewell, D. December 17, 2010). How best to utilize these financial resources in order to build brand equity is of critical concern for the company.

Summary of the Case

The P&G case study looks at how the 55 billion in annual revenues organization, (now 79 billion as of 2010) (CNBC) has garnered market share and extensive growth via multiple advertising streams both traditional and in the last two decades the internet and digital media. The company has for years been at the forefront of experimentation and utilization of advertising mediums, and their perfervid focus on reaching customers through web access has allowed them to pursue their objectives of "developing brand awareness and brand equity; collecting valuable data from consumers; cutting down on advertising costs, and conducting one-to-one advertising" (P&G case study). The case study posits an important question of whether P&G "the leading consumer packaged- goods company on the Net because they're willing to try everything" (P&G case study) will continue to adroitly adapt to the changing face of advertising mediums and channels.

Proposing a Solution

Since 2004 the advent and rise of digital media has allowed P&G to aggressively spend advertising dollars in mediums such as Facebook, Twitter, and YouTube which fulfills their major objective; building around each major product a community of users" (P&G case study). As P&G Marketing Chief Marc Pritchard indicates "digital media has pretty much exploded, it's become very integrated with how we operate, and it's become part of the way we do marketing" (Sewell, D. December 17, 2010). The success of social media sites is built around the interaction of not just individuals with one another, but the widespread connectivity of groups of users and those that share common interests.

The tremendous surge in popularity of these social networking and digital media sites has changed the way in which companies advertise. One example of this phenomenon is particularly instructive for P&G. The company released a YouTube spot commercial starring former football player Isaiah Mustafa. The video "Smell like a Man, Man" promotes P&G's Old Spice brand and quickly became a viral internet sensation. In measuring the effects of the ad, P&G released the following data: 1.8 billion individuals watched. read, or heard it, 140 million YouTube viewings, and a 2,700% increase in Twitter followings of Old Spice (Sewell. D. December 17, 2010). How has all this attention impacted Old Spice and P&G? Interestingly in two ways. First "Old Spice revenues are growing at double digits, taking more of the market for body washes and deodorants" (Sewell. D. December 17, 2010). Second and more profound is an enhancer effect on P&G because of the reverberation of the ad around the globe. Bob McDonald

indicates "it is such an effective advertising campaign that we are getting impressions that we did not pay for" (Sewell. D. December 17, 2010). There is the true value of social media and digital networking for companies; the ability to strengthen brand equity through a chain of comment while not spending additional dollars.

Learning Application

P&G's embrace of digital and social media again places them at the forefront of the advertising revolution. It is interesting to note that just recently the company pulled the plug on a 77-year commitment to daytime soap operas, citing that two-thirds of its audience had been lost, as "women increasingly moved into the workplace, switched to talk and reality shows, and spent more time using online media and social networking sites" (Sewell. D. December 17, 2010). The move to these new mediums is not only logical but cost effective, in that customers can be reached at times when they are most receptive and most willing to communicate with peers, friends, and colleagues. The individual customization of ad content will continue to be the dominating force in advertising over the coming decades. P&G is even now working on formulating new applications for the advertising spend; hosting a "digital night at its Cincinnati headquarters by inviting Google, Facebook, Twitter and other online experts to help test ways online and digital media could be used in marketing" (Sewell. D. December 17, 2010). With an advertising budget of nine billion dollars a year (Sewell, D. December 17, 2010), P&G must continue to innovate and create new opportunities for revenue growth, much of which will come from the BRIC countries and other parts of the developing world. A mix of both traditional and contemporary advertising mediums will be necessary dependent on locations and demographics however; there is an unmistakable wave of technological innovation which will continue to allow companies including P&G to solidify and grow brand equity, revenues, and profits.