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P&G rethinks Facebook

News, 11 August 2016

CINCINNATI, OH: The world's biggest advertiser is changing its approach to Facebook, having decided that close ad targeting is not the most effective way of spending its marketing budget.

"We targeted too much, and we went too narrow," said Marc Pritchard, chief marketing officer at Procter & Gamble, in remarks reported by the Wall Street Journal. "Now we're looking at: What is the best way to get the most reach but also the right precision?"

The greater importance of reach in Pritchard's thinking was further emphasised by the intention to scale back spending on smaller digital sites that do not command the sort of audience figures boasted by the likes of Facebook, Google and YouTube.

This new strategy ties in closely with the arguments put forward by the Ehrenberg-Bass Institute and popularised by Byron Sharp in his book 'How Brands Grow'.

Sharp has outlined the dangers of over-segmenting and over-targeting to niche audiences because, in reality, the majority of a customer base isn't made up of niche buyers, but of buyers of many types.

But Pritchard isn't completely abandoning targeting and will retain this approach in certain clearly defined cases, such as serving diaper ads to expectant and new mothers.

Nor does he anticipate spending less on Facebook ads, given the platform's scale. Instead, P&G will simply spend its budget differently.

The social media giant's precise targeting tools may be more attractive to different types of businesses than P&G, according to Brian Weiser, analyst at Pivotal Research.

"The bigger your brand, the more you need broad reach and less targeted media," he said, adding that targeting was more useful for a small business trying to appeal to local customers, or a developer seeking to get users to download a game app.

Meanwhile, the limitations of targeted advertising were highlighted by Peter Daboll, chief executive of Ace Metrix, which tests ads for effectiveness. 


"If you could run an ad and reach a million people or run a targeted ad to reach 5,000, you have to have pretty impressive returns on that 5,000 to make it worth it," he said.

Data sourced from Wall Street Journal; additional content by Warc staff