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P&G’s advertising future defined by AI and a social conscience

P&G’s advertising future defined by AI and a social conscience

Procter & Gamble’s Marc Pritchard has hailed artificial intelligence as the future of advertising, while urging marketers to produce work that can act as a force for good in the world.

Speaking at Dmexco 2017, the chief brand officer of the world’s largest advertiser said innovation in AI is finally allowing brands to reach consumers in useful and engaging ways – and on a scale that has been impossible until now.

“The next powerful stage of brand-building is mass one-to-one marketing,” Pritchard said. “For more than a hundred years, brand-building has been about mass; blasting messages as far and wide as we possibly can, hoping to catch someone’s attention, to get them interested in buying our brand.

“This led to the Wanamaker principle, which is: half the money I spend on advertising is wasted, the trouble is I don’t know which half. Now, with the advent of consumer-identifiable data, we’re finding out which half.”

Meanwhile, Pritchard also urged brands and companies to become “responsible citizens” – and to use the power of digital technology to use advertising as a force for good.

“Today people want to know a lot more about brands – what they believe in, the people and the companies behind them; they want to know about the brand’s track record on environmental sustainability, diversity and inclusion, ethics,” Pritchard said.
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“The disruption of communications through social media, online video, viral sharing is enabling brands and companies to not only do well in business, but to do good.”

Pritchard, whose fame has risen enormously since his bombshell speech at the start of the year calling for the digital supply chain to be cleaned up, also used his time on Wednesday to reiterate that mission.

P&G is currently poring over every agency contract in an attempt to achieve “full transparency” by the end of 2017 – including terms requiring funds to be used for media payment only, all rebates to be disclosed and returned, and all transactions subject to audit.

That also means adopting basic viewability standards, ditching the adtech middle men, breaking down walled gardens, and getting serious about measurement.

In line with that commitment, in July P&G said – while cutting more than $100 million from its digital marketing spend – it had reduced overhead, agency fee and ad-production costs in the second quarter.

Since Pritchard’s call-to-arms, other global brands have made major changes, or are planning to make extensive changes, to their media governance practices across a wide range of areas, according to the World Federation of Advertisers (WFA).

In the last 12 months, 35 multi-national companies with a total annual marketing spend of more than $30bn globally said they have taken action on issues including transparency, brand safety, viewability and ad fraud.

Transparency remains a top priority for 47% of companies, while 51% say it is rising up the list. However, 14% said it is de-escalating, which the WFA says suggests some companies are seeing progress.

In an effort to improve transparency, 65% said they have improved their internal capabilities via moves such as hiring a head of programmatic, while more than 70% have amended their media agency contracts and 58% have included terms that define agency status as agent or principle at law.

On Wednesday, Pritchard also showed his support for the third-party verification of ads, something he said was essential to stop the industry grading its own homework.

P&G said that a recent investigation showed consumers, in some instances, were being targeted thousands of times with the same ad, but by working with major retailers P&G is now able to make sure consumers are only targeted when there is purchase intent, cutting waste by 20% and boosting ROI four times.

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