P&G Mulls Upping Retail Media Spend
Giant media spender Procter & Gamble is treading into retail media.
“I generally believe the majority of brand choice is made in a retail environment,” P&G President/CEO Jon Moeller told investors during a Friday morning earnings call.“I think less brand choice is made sitting on a couch or even driving in a car on the way to a retail establishment. The same is true for online. So, we’re very carefully evaluating this opportunity.”
“Retail media needs to earn its place in our marketing mix model based on the relative return it can provide,” added Andre Schulten, P&G chief financial officer. “Are we working with our retail partners to maximize that return? Absolutely.”
In particular, Schulten cited “opportunities in data sharing, combining transaction data with media data to optimize” as “a strong reason why retail-based marketing spending can make sense.” In many cases, he said, “a well-timed investment in retail media, in line with merchandising plans on the floor or online, can supply superior return on investment.
The remarks came as P&G posted sales of $82 billion for its fiscal year, 2023, which ended June 30. That was up 2% from fiscal 2022, but 7% organically, which excludes the impacts of foreign exchange rates, acquisitions and divestitures.
Ecommerce sales also increased 7%, now accounting for 17% of all P&G sales, Schulten said.
“It’s getting harder and harder to distinguish between ecommerce and traditional commerce,” Moeller stated. “That’s true even in conversations with our retail partners. Most of the large brick-and-mortar retailers are emphasizing the development of ecommerce in different forms themselves… More of the conversation is “How can we work together to fully satisfy our shoppers, many of whom prefer an ecommerce experience’?”
P&G, which has been increasing its ad spend recently after some down quarters, is seeing “savings from improved marketing productivity, more efficiency and greater effectiveness, avoiding excess frequency, and reducing waste,” Moeller said.
“As we further develop our ability to target more efficiently in the media space, we generally see a higher return on investment on every incremental dollar we spend,” added Schulten. “So we will carefully push in that direction because we believe that more awareness on stronger innovation and superior product will drive the market and our growth.”
Schulten pointed to the launch of Cascade Platinum Plus dishwasher detergent, with “no pre-wash, no re-wash” as an example, while Moeller singled out Dawn Power Wash and Dawn Easy Squeeze as two innovations that drove 17% annual growth in the hand dishwashing category and a 1.5 point increase in P&G’s share of market.
“When we have great ideas, when we can increase consumer and shopper delight, we’re in good shape,” stated .Moeller.
Perhaps coincidentally, then, P&G Ventures’ Zevo, the CPG company’s first insecticide, which is said to be “people-friendly,” announced a new ad campaign starring actress Rebel Wilson Friday morning. Sporting survey results show that 71% of 25- to 50-year-old Americans suffer from “bugxiety.”
In humorous ads, Wilson bemoans things that still “bug” her now that Zevo has erased her insect issues: holding yoga poses for too long, hearing people mispronounce words, and sitting at wobbly restaurant tables.
The paid campaign is running across digital and social channels.