As the world’s biggest advertiser, Procter & Gamble is often a bellwether for the industry’s future. Its approach to in-housing, outlined here by Stephen Whiteside from WARC, should thus be of interest to brands and agencies alike.
Procter & Gamble, the consumer-packaged goods giant, has embraced this approach by pushing its internal teams to have their “hands on the keyboard.” As a result, in-house employees could now be handling various tasks, from buying programmatic ads to using data and analytics to generate insights.
But Marc Pritchard – the Cincinnati-based organization’s chief brand officer – asserted that the owner of blue-chip offerings such as Always, Bounty, Pampers, and Tide is taking careful steps to make sure “we don’t get too overwhelmed” by the in-housing trend.
“The way we've been thinking about it is [as] more of an agency reinvention, where we move from outsourcing to really getting our hands on the keyboard,” he told delegates at the Association of National Advertisers’ (ANA) 2019 Media Conference.
Underlying the enterprise’s in-housing logic is an attempt to address two fundamental questions:
- “What should we do?
- “What should somebody else do that creates the most value for consumers and for our company?”
Some directional answers have started to emerge. Trade title Adweek reported earlier this year that an internal team from P&G bid against Hearts & Science and Carat to handle “seven separate categories of the North American P&G business” – including baby care, fabric care, feminine care, home care, oral care, personal healthcare, and skincare. According to the industry publication, the in-house team won media-buying duties for oral care.
Elsewhere, an arm of P&G known as “Woven” – which is based at Saatchi & Saatchi New York – also forms part of a collaborative unit that spans different holding groups.
Addressing the ANA Media assembly held in 2018, Pritchard explained the logic behind such moves: “Over time, our marketers have steadily outsourced our work to agencies. This has resulted in too many touchpoints between brand managers and consumers, and a lot of project management versus brand management,” he said.
“We need our people closer to the consumers they serve. And we need fewer project managers and more brand entrepreneurs. This means renewed partnerships to work with agencies, not through agencies. That means we’ll pay for what creates the most value for consumers and discern what work should be done by our people versus agency people.
“In media, for example, data and analytics are enabling us to bring more planning in-house, replacing multiple layers. When it comes to buying, our procurement people can negotiate with the best of them, so we are doing more of our private marketplace deals in-house.”
At the same event last year, he offered some hard numbers to support its strategy. “Reinventing agency partnerships to get our hands on the keyboard is not only saving money – $1.2 billion in total that we’re reinvesting to drive growth – it’s leading to higher-quality execution, faster engagement, more entrepreneurship, greater creativity, and a lot more fun for the marketer.”
At a conference held by the 4A’s (American Association of Advertising Agencies) last year, Pritchard further outlined three agency models that the company was testing:
- In-Sourcing: Teams inside P&G’s four walls have control media responsibilities in certain instances.
- People-First: Such an approach was being employed in the fabric-care segment, and allowed P&G to draw on talent from a variety of shops to combine teams that served its evolving requirements.
- Fixed and Flow: In this case, fixed retainers are given to P&G’s agencies of record for planned initiatives throughout the year. Other funds are then set aside to be spent in more flexible ways as needed among different shops.
Whatever model it applies, Pritchard told the 2019 ANA Media confab, the goal is essentially the same. “What we want to do is ensure that our marketers and media professionals are really closer to the consumer, closer to the media providers, and closer to the data,” he said.
“In some cases, that is with a partner. In some cases [it’s] not, [and] we're going to pull that inside.”
A slate of broader factors contribute to P&G’s in-housing strategy, too:
- Geography: “It differs, actually, by market,” Pritchard explained. “It’s different by country, because media conditions are different in every country.”
An indicator of how individual markets can lead the way, he continued, involves transforming the media supply chain – another current point of focus for P&G.
“We've got some breakthroughs that are happening in China; breakthroughs in the UK. I was just in Japan, Singapore and India … [and they are pursuing] enormously innovative approaches in terms of how they're handling media,” said Pritchard.
“All of these things apply, and they were inspiration for this – not least of which was the United States and Canada, who’ve done some extraordinary work.”
- Category: Separate verticals have unique characteristics, drivers and foundations that demand a tailored response.
- Brand: The in-housing impulse can vary “by brand”, too, with distinct product lines having bespoke features – for example, their scale and budget.
As demonstrated by the forces that are shaping its in-housing strategy, Pritchard suggested to the 2019 ANA Media gathering that a “one-size-fits-all” paradigm is not appropriate. In fact, P&G is already reorienting its approach to internal marketing as it tests and learns over time.
“We've already started to make changes on it,” he reported. “And so I think it's another important distinction.”