A man of purpose
27 June 2012
As the globe’s largest advertiser with an annual spend of $10bn on marketing and advertising, the stage has always belonged to P&G. In an interview with M&M Global, chief marketing officer Marc Pritchard explains why people and not businesses build brands; and how being a socially responsible corporation translates into stronger return on investment
The $100m global sponsorship of the Olympics until 2020; a portfolio of 30 brands to promote the Games to the marketing power of $19bn; 130 athletes as ambassadors for the different P&G brands; and every mum in the world who P&G wants to “thank” through its Olympics campaign. This is what should keep Pritchard up at night.
It certainly does. But P&G’s chief marketer confesses that “the speed of brand building, which is moving into real-time, and the need to maintain a one-to-one relationship with consumers around the world” also keeps him tossing and turning in bed. This is someone who, after all, sits at the helm of a $10bn marketing budget, which he now has the task of cutting by $1bn as part of a $10bn saving by 2016.
And just as much as he believes that his job as one of the most influential marketers in the world is to engage with people and bring them into everyday conversations about his brands, he stresses that the recent efficiency drive is not indicative of P&G's inefficient ways. The cuts, according to Pritchard, will come by spending more efficiently, more on lower-cost digital marketing activities, and probably easing away from expensive broadcast advertising. Ultimately, why would P&G not want to replicate the runaway success of its Old Spice brand social media campaign, 'The Man your Man Could Smell Like', with very little media spend?
“The cost-saving announcement is part of our $10bn savings from the overall business, and a billion dollar efficiency is from marketing. We will continue to spend more money each year, and our marketing is going to be at the same rate as our spending in the past, which will allow us to save money,” he says.
A few years ago, P&G reformulated its agency structure to move away from decentralised agency planning to brand agency leader, where each brand has a single agency lead that is responsible for an integrated agency team. P&G says that it has already been reaping the benefits of holistic communications with more efficient spending and integrated marketing.
Pritchard claims not to know that William Lever, the founder of rival FMCG giant Unilever, first said: “I know that half my advertising budget is wasted; but I’m not sure which half,” but he quotes it and adds that P&G is committed not to waste any of its marketing and advertising funds.
The broadcast world, he adds, allows for tremendous reach and P&G has marketing models in place to achieve strong efficiencies in the arena. “What the digital world gives us is a more targeted media. Even within digital there is a lot of content, loads of ads that nobody ends up seeing. So what we are doing is getting out great content and ideas that people pay attention to; more targeted through digital ad placements; and also more one-to-one connections through Facebook, Twitter and Google.”
Connecting the dots
In Pritchard’s ideal world, P&G will be able to connect TV, online and mobile and use these tools to enhance the experience of consumers. He talks about a joint business partnership with Facebook, Google, Microsoft and Yahoo, which he calls “value creation”.
For instance, during the sponsorship around the Special Olympics last year in the US (P&G is the sponsor of the US Olympic team), Facebook “provided” P&G with a video creator allowing fans to pull their own pictures into the video creator to thank their mums. The activity added 200,000 Facebook fans and generated about half a millions dollars worth of investment.
Meanwhile P&G is working with the industry to define GRPs (electronic gross rating points) to define what an impression from Facebook, Google or Twitter is worth.
“For me, a brand creates value when it connects with consumers,” adds Pritchard, who is also responsible for brand building, agency relationships, market research, design and public relations. And that is something he keeps coming back to – the consumer. P&G is following the consumer, he says. “The move to plough more money into digital is also part of that big cost-cutting plan. With consumers moving more into digital, with 20-25% of their time spent online, P&G is going where the consumers are.”
Giving purpose to marketing
To engage better with his consumers he wants to add an extra ‘P’ to the four Ps of marketing: product; price; promotion; and place. Pritchard wants ‘Purpose’ to be included in the fundaments of marketing. “P&G’s purpose is to touch lives and improve life and to do that every day in different ways, and therefore make a difference.” He says that P&G has always looked at and listened to its consumers “but not as consumers consuming our products, one body part at a time, but as people who are telling us that they expect us to do good.”
The “more good the company can do”, he says, the better the return on investment. Pampers UNICEF programme, for example, which provides tetanus vaccinations for vulnerable mothers and their babies, is one of the company’s strongest return on investment programmes.
P&G asks every brand to find how it could make lives better. Pritchard cites Pampers’ ‘Golden Sleep’ campaign, created from the simple idea of a nappy being absorbent enough to help a child sleep through the night. “From this insight emerged the campaign inviting parents to send in pictures of their sleeping babies. We turned those images into lanterns, put on a big dragon float for the New Year, as this is the year of the dragon.” Pritchard adds that this also demonstrates how P&G’s agency partners fit into its aims and ambitions, while allowing for big ideas to develop.
It was, after all, ad agency Wieden+ Kennedy that convinced him to take the plunge with the Olympics global sponsorship. Wieden+Kennedy’s idea that P&G brands are in the business of helping mums in their everyday tasks, and that P&G could use the sponsorship as a vehicle to thank them, gave Pritchard goosebumps.
Pritchard tells the story. P&G’s sponsorship of the Olympics dates back to 2010, when the company decided to sponsor the Games at Vancouver. “But when we started talking about the global Olympics sponsorship, which is about world-class athletes, and so requires world-class marketing, my first thoughts were that P&G and its brands have really nothing to do with the Olympics.”
He adds: “I asked the agencies to give me an idea that unties the purpose of P&G of touching lives and improving lives with the purpose of the Olympics – a sport. When I first had a look at how our planners were shaping up, I did not think it was a world-class idea. But then days later I was presented with the Olympics and the Mum idea and I knew then that it was big.” P&G’s ‘Proud sponsor of Mums’ campaign includes highly emotive adverts and the company's biggest ever initiative.
Not just for altruistic reasons, P&G knows that the rewards from this sponsorship are measurable. In the UK alone, P&G’s corporate brand has increased by more than 20% in familiarity and over 10% in favourability with consumers. Its sponsorship of the US Olympics team has helped the company increase its image, boost marketshare and generate nearly $100m in incremental sales. The London 2012 deal is the most expansive for P&G. It will begin with London and include the subsequent four Olympics across the next 10 years.
For a company that already operates in more than 1,000 country-category combinations and has set itself a target of adding another one billion consumers over the next five years to the estimated four billion it currently reaches, this is a big deal.
And with developing markets now making up about 37% of P&G’s sales, up from 20% in 2000, this global sponsorship will give greater visibility in emerging economies. P&G brands, including Tide, Pampers, Gillette and Crest, will join established sponsors such as McDonald’s, Coca-Cola and Visa at the 2012 Games in London. “Our Olympics sponsorship is about bringing pride and happiness, and about making connections with consumers. It will also be about thanking every mum in the world for everything they do,” he says.
This will be Pritchard's legacy.
By Sonoo Singh