P&G CEO Discovers Social Media Marketing Is Free!
Procter & Gamble CEO Robert McDonald has discovered that social media marketing is free.
McDonald has agreed to "moderate" his ad budget because Facebook and Google can be "more efficient" than traditional advertising media.
This recent discovery has coincided with a cost-cutting exercise that will see P&G lay off 1,600 staffers, including marketers. McDonald’s $10 billion annual ad budget has hurt the company’s margins
When asked about his ad spending, he said:
“As we've said historically, the 9% to 11% range [for advertising as a percentage of sales] has been what we have spent. Actually, I believe that over time, we will see the increase in the cost of advertising moderate. There are just so many different media available today and we're quickly moving more and more of our businesses into digital. And in that space, there are lots of different avenues available.
In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient. One example is our Old Spice campaign, where we had 1.8 billion free impressions and there are many other examples I can cite from all over the world. So while there may be pressure on advertising, particularly in the United States, for example, during the year of a presidential election, there are mitigating factors like the plethora of media available.”
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