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Why P&G proves that precision targeted advertising is a mess

24th Aug 2016
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For years now I have been spouting off about the wrong-headedness of online "precision targeting" versus mass media.

In 2012, in a post called Either Facebook Is Nuts Or I AmI wrote:

"Big brands need big reach, not the diminishing returns of finer and finer targeting...They (Facebook) needs to forget about "precision targeting." It's bullshit and it's not working...They need to sell reach."

In 2013, in a post called The Hidden Danger Of Precision Targeting I wrote:

"One of the great benefits of mass media is that it lacks precision targeting. It reaches all the users in your category, including the users of your competitor's brand."

In 2014, I wrote The Power Of Sloppy:

"Have you ever wondered how McDonald's and Coca-Cola and Nike and Toyota and Apple and all the other enormous worldwide brands became successful? For one thing, they were sloppy. They had to be. They didn't have big data or precision targeting. They couldn't punch a key and immediately identify left-handed Lutheran dry cleaners who rode recumbent bicycles. So they had to use mass media and talk to everyone. Not only did they not suffer for it, they prospered from it."

In 2015, in a post entitled "What If Targeting Doesn't Work" I wrote:

"What if all the 'precision targeting' we do is mostly unnecessary complexity masquerading as knowledge?"

Earlier this year, in Waste Not, Grow Not, I wrote:

"We are thinking like direct marketers, not brand marketers. We are ineffectually using 'precision targeting' to try to engage the perfect individual, and by eschewing mass media we are harming our brand in three ways. 

1. We are not reaching those within our target segment who are not active on line or whose data we haven't mined.

2. We are not reaching the unexpected...buyers, of whom there are legions. 

3. We are not building a brand. Mass media advertising may be "wasteful" by the nearsighted standards of digital and direct marketers. However, some very wise people have pointed out that the nature of what we call "waste" may, in fact, be the very stuff that brands are built on."

And then there was this.

This month, my years of aberrant ranting finally got some vindication when The Wall Street Journal ran a story entitled "P&G To Scale Back Targeted Facebook Ads"

"Procter & Gamble Co., the biggest advertising spender in the world, will move away from ads on Facebook that target specific consumers, concluding that the practice has limited effectiveness. Marc Pritchard, P&G’s chief marketing officer, said the company has realized it took the strategy too far. 'We targeted too much, and we went too narrow'

P&G could be the bellwether on how consumer goods companies and big brands use digital advertising. Over the past year some marketers, specifically consumer product companies, have discovered they need to go 'much more broad' with their advertising "

I hate to be the one to say "I told you so"...wait a minute. No I don't.

The nature of the beast

P&G is discovering too late what a growing number of big-time advertisers have found out - the headlong rush into "precision targeted" display advertising has been a mess.

The headlong rush into "precision targeted" display advertising has been a mess.

The age-old strategy of data-based direct marketers (which is essentially what "precision targeted" online advertising is) is proving to be a failure for brand marketers.

By 2013, P&G had moved over 1/3 of its ad dollars online.

In 2014, P&G cut ad spending by 14%.  Why were they cutting ad spending? The usual delusional horseshit about online advertising:

“...effectiveness and the consumer impact of our advertising spending will be well ahead of the prior year, optimized media mix with more digital, mobile, search and social presence..." said their cfo.

And what has been the result of all this optimised media brilliance? In the past 12 months, P&G's sales results have been a disaster, with an alarming sales drop of 8%. And when you're P&G, 8% equals 6 billion dollars.

As my regular readers know, I have been warning advertisers about the bullshit they have been sold about "precision targeting" for years.

But let's be careful before we blame targeting for all the problems of display advertising. It goes deeper than that. It's not just the targeting that's the problem for big marketers. It's the nature of the beast.

It's not just the targeting that's the problem for big marketers. It's the nature of the beast.

Online display advertising has evolved into electronic junk mail. If you're a direct marketer, or if you're running a short-term promotion, maybe display can be effective. But if you're a brand marketer, it's a sinkhole. Ask P&G.

P&G is not moving money out of Facebook, it is just re-arranging its Facebook investment to buy reach instead of "precision targeting."

But buying more reach is not the same as getting more impact. And from the corner office here at The Ad Contrarian Worldwide Headquarters, it still looks to us like display advertising, in any quantity and on any platform, has very little impact.

As we reported a few weeks ago, a recent study shows that the amount of attention consumers pay to display ads is shockingly low.

There is a little voice inside me whispering that P&G is actually covering for Facebook by converting their "targeted" dollars to "reach." Something is telling me that perhaps P&G is locked in to an advertising contract with Facebook and is just doing what it can to waste less money.

It may take a few years to find out what's really going on here. Stay tuned.

Bob Hoffman is a writer, speaker and partner in Type A Group which advises agencies, marketers, and media. Bob has been the CEO of two independent ad agencies and the US operation of an international agency. He is author of the popular “Ad Contrarian” blog and has written several books including “101 Contrarian Ideas About Advertising” which became Amazon’s #1 selling advertising book.

This article is based on posts that originally appeared on the Ad Contrarian blog. Reprinted with kind permission.

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