P&G Marketing Boss Slams Ad Industry for Foot-Dragging

13 February 2004

Procter & Gamble's global marketing officer Jim Stengel will today (Friday) deliver the keynote speech to delegates at the annual media conference of the American Association of Advertising Agencies -- and in archetypal P&G style, he isn't pulling any punches.

In a ten-year overview of the ad business, Stengel will opine that the ad industry has failed to keep up with sweeping changes in the market, nor with consumer mindsets, and that it must quickly embrace a shift to 'permission marketing'.

In stern tones he will warn that the industry is close to failing the task set out ten years ago by P&G's quondam chairman/ceo, Edwin L Artzt (pause for genuflection and ritual breast-beating). Marketers therefore must swiftly embrace holistic approaches, a universal commitment to "permission marketing" and new ways of measuring change.

Stengel will then mark the industry's grade exam papers -- and the industry needn't expect leniency. He will award the recalcitrant students an overall 'C'.

"These kinds of grades aren't acceptable," he will admonish. "I've got two children -- a son and a daughter. I can tell you that if this was one of their report cards, we would be having a heart-to-heart talk -- more homework, less socializing, more tutoring, more commitment to improve!"

Stengel's clarion call will not so much address the need for new media as it will the better use and measurement of the profusion of media already fragmenting the marketing landscape.

"All marketing should be permission marketing. When we think of permission-based marketing, most of us think about opt-in online newsletters. We really need to expand this mentality to all aspects of marketing. ... For each element of the marketing mix, we should ask ourselves, 'Would consumers choose to look at or listen to this,' and let that be the benchmark."

P&G already weights its copy testing more on whether consumers say they'd like to watch the ad again. But Stengel is not impressed by a market research mindset which focuses primarily on TV while measurement of other segments of the marketing mix is underdeveloped. Even TV research, he observes, often fails to measure the most important thing -- whether it makes people buy things.

"This is a $450 billion dollar global industry and we're all making decisions with less data and discipline than we apply to $100,000 decisions in other aspects of our businesses," Stengel will continue. "We lack an industry standard for measurement. We need a method to determine the effectiveness of our efforts. We need to measure how effective our advertising is at influencing purchase intent -- the ultimate goal."

P&G remains committed to its roster of ad agencies, though it is also reaching out to a growing array of new marketing services providers. Among these are Viacom in media, IDEO in design, Thompson-Murray (instore marketing), CAA and Grey Alliance (entertainment), Northlich (influencer marketing) and TargetBase (database marketing).

"Sometimes, when we're afraid of change, it's easier to focus on the smaller issues," Stengel will conclude. "There's too much conflict in the industry today about purchasing, procurement, the pitching process, fees, etc. It's time to recognize we are part of something bigger than our financial interests."

Data sourced from: AdAge.com; additional content by WARC staff