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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.

Statement of the Problem

P&G's dilemma is qualitatively no different than the thousands of companies which struggle with balancing advertising spending and generating revenue, and building brand equity. For P&G brand equity concerns not just the individual products; Tide, Pampers etc. But the corporate name itself. Bob McDonald pointed to this fact stating that "there is some advantage to making Proctor and Gamble as a company more like a brand. If you look at investors, they buy our company; you look at the various lists out there- Most Admired, Most Respected companies-they're about the company, not about the brands" (Sewell, D. March 6, 2010). At the time of the case study (2004) P&G was experimenting with new online approaches: "developing market partnerships, investing in promising start-ups, and joining a B2B marketplace consortium" (P&G case study).

Since the case study the company has continued to move aggressively in reaching customers and strengthening brand equity through innovative online and digital media approaches. In order for an advertising medium to be successful it must trigger one of three components of brand equity: financial (the premium on a product that the firm can charge), extensions (the ability of the company to launch additional products off of others), and consumer attitude (the strength of customer conviction in the brand) (NetMBA, N.D.). Yet, for P&G the dollars spent on advertising may strengthen brand equity but not increase revenues to the degree requisite to justify the cash outlays; finding that correct balance is critical for long-term success in the highly competitive industry.

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.

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