Basics Are Back, A Bit Less Digital

Michael Hedges March 5, 2018 Follow on Twitter

So much newness is upon the land. Everything is new. Even new is new. But that’s not news. What can we use? Do we choose? Along the way we are confused. Are we in the supply chain or dissolved into Blockchain? Many have the blues.

Consumer products company Procter & Gamble (P&G), the world’s biggest advertiser, cut US$100 million from digital ad spending last spring and another US$100 million in the autumn. The money was shifted to TV, audio and e-commerce, reported the company (March 1). For those P&G brands affected, marketing reach increased 10%.

The concern, said chief brand officer Marc Pritchard last week to the Association of National Advertisers media conference, was “transparency,” quoted by Reuters (March 1). “Transparency shined a spotlight on reality and we learned valuable lessons which are driving profound change. With transparent viewability data, we learned that the average view time for an ad on a mobile newsfeed is 1.7 seconds – little more than a glance – pushing us to innovate.”

The “archaic Mad Men” model is in Mr. Pritchard’s cost-cutting sights. “We need fewer project managers and more brand entrepreneurs. Creatives represent less than half of agency resources, because they’re surrounded by excess management, buildings and overhead.”

Much of that US$400 million, a small but not insignificant slice of the company’s US$7.1 billion global ad budget, was pulled from YouTube - subsidiary of Google, subsidiary of Alphabet - because of ads adjacent to dodgy content. Announcing P&Gs first tranche of digital withdrawal last year Mr. Pritchard referred to advertising by algorithm as “murky at best, fraudulent at worst.”

Mr. Pritchard did praise engineers at YouTube, Facebook and Snapchat for their quick response to the social media PR disaster that plagued P&Gs laundry detergent product Tide. Certain people, it seems, were eating Tide Pods like, er, candy. Very bad for your health. “Within a matter of hours,” he said, “the entire YouTube platform was swept clean of these dangerous videos and changed the algorithm to ensure Tide’s safety video reached anyone searching for this unsafe behavior. This not only reflected the right attitude, it demonstrated that the work over the past year gave them better control over their platforms.” By contrast, removing hate speech and fake news from social media portals requires legislation and court orders.

In mid-February Unilever chief marketing officer Keith Weed gave a rousing keynote address to the Interactive Advertising Bureau annual leadership meeting calling on social media portals to “drain the swamp that is the digital supply chain,” reported The Drum (February 16). Consumer goods producer Unilever is the world’s second biggest advertiser, spending US$2 billion. The company, he said, will “only partner with organizations which are committed to creating better digital infrastructure, such as aligning around one measurement system and improving the consumer experience.”

At another point along the digital supply chain, WPP, the world’s largest advertising and marketing holding company, announced 2017 revenues 0.3% lower than 2016, reported Reuters (March 1). The company’s three-decade annual revenue growth rate has averaged 5.5%. Always quotable WPP chief executive Martin Sorrell said it was “not a pretty year.”

He, too, blames Google and Facebook for disintermediation - eliminating the middle-man. Along the digital supply chain that means ad agencies and media buyers. At the same time, the annual financial report shows WPP shovelling 10% more of clients money to Google and 30% more to Facebook.

Some traditional publishers, barely a blip on that digital supply chain, believed they had a strategy vis-a-vis Google, Facebook, et.al. figured out: bad headlines. Then the algorithms changed. News Corporation’s chief executive Robert Thomson, also good for a quote, repeated that “too many publishers have become patsies,” reported Bloomberg (March 1). He wants carriage fees, just like cable companies pay TV producers.

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