Discussion in 'Economics' started by cstfx, Jan 31, 2012.
Interesting article. Wonder how many other companies might follow that route.
.tough call man.
They had better beg A.G. Lafley to come back.
That's a terrible ROI on advertising... spend 24% more on advertising and only get a sales lift of 6%?
You'd figure that a company like P&G would have it's marketing analytics fine-tuned. You'd figure they are monitoring advertising response, watching sales response, and running sophisticated simulations, and calculating marketing ROIs. I guess they dropped the ball...
Back a few years back, P&G was rocking and Colgate Palmolive was under-performing. Now, it looks like the roles have reversed. P&G should take a hard look at what Colgate Palmolive is doing in marketing analytics... because it looks like they fell asleep at the wheel.
Advertising spending has a saturation point... after a while, you're just reaching the same audience for the umpteenth time, and people just tune out your Tide commercials. Of course Saatchi & Saatchi are going to tell you to keep making and running their ads... that's what they sell. You can't let your agencies and ad sales people tell you that your ads are working, you gotta get your own metrics... which is do-able since you have your own sales figures broken down by market and you have your own ad spending numbers internally.
As for moving more of your advertising budget to digital: Yeah, it's a nice idea, but digital has a much, much lower saturation point than traditional media advertising. You can see that in the Republican presidential nomination campaign: Ron Paul rules the web, and heavy web users are gaga over the guy, but he has a hard time polling over 15% nationally outside of the Interwebs. So, yeah, your Old Spice Horse Guy might get a million impressions or views on Facebook/YouTube, but you're really only reaching the same 10,000 dweebs watching that crap over and over again... and they ain't necessarily engaging in you product or your message... they are enjoying your viral video and posting it as a Facebook update so they can seem really hip to their Aunt Ginny in Kenosha... who, likewise, doesn't give a crap about men's deodorant.
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