Media in-housing pays off for P&G

For Procter & Gamble, bringing media planning in buying in-house for its crucial fabric care category has allowed the company to drive reach while saving more than $65m in advertising spending in the US market, according to the company’s executives. 

Why it matters

While the in-housing of marketing functions previously outsourced to agency partners has been attempted by many brands, the change can be difficult and many brands have been unable to successfully implement it. P&G, which is one of the world’s biggest advertisers, marks a success story. 

P&G saves money ...

The Fabric Care team in the US brought their media planning and buying in-house and developed proprietary algorithms to better place ads during TV programming, which is a crucial channel for driving reach. 

“That in and of itself has allowed $65m of savings in one year, while increasing frequency,” said Andre Schulten, Chief Financial Officer at Procter and Gamble, on its most recent Q2 2023 earnings call. 

… but the move is not without challenges

One major challenge for brands seeking more marketing functions in-house is the need to restructure their existing partnerships and processes, for example:

• Reshaping the marketing team culture to take over elements previously handled by agency partners. 
• Hiring enough in-house expertise to match what is being lost from agency partners, especially in priority areas such as media planning and data.
• The risk of losing momentum in the market during the transition, or the project failing altogether, requiring an expensive and time-consuming move back to collaborating with agency partners. 

“There are many categories in the US that are still building their own approach to drive these synergies and there's the whole world outside of the US, which is still building on the capabilities that we are developing. We see this as an area of continued investment, in terms of our own capabilities, with a great ability to drive productivity for years to come,” Schulten said.

Sourced from Seeking Alpha