Flush With New Ideas About Ads
Procter & Gamble massages its messages
For holiday shoppers in New York's Times Square last December, it seemed like an oasis. In the middle of a Broadway block, a huge, blue neon sign reading "Restrooms" beckoned visitors to ride an escalator to a second-story waiting area with flat-screen televisions, couches, and a fireplace. Twenty pristine toilets in stalls with hardwood floors, each hand-cleaned by a waiting attendant, provided locals and tourists welcome relief.
The endeavor wasn't the gift of an altruistic bathroom benefactor. Instead, it was Procter & Gamble's attention-grabbing bid to hawk Charmin toilet paper. In an effort to reach customers who increasingly ignore television commercials and browse YouTube, P&G has been testing out new marketing moves at a frenzied pace over the past two years. "I don't think we can afford not to experiment," says Lynne Boles, vice president of global advertising at P&G. "We're going to try everything." So far, some experiments have worked better than others, but the trial-and-error attitude represents a fundamental shift making its way through consumer product companies selling everything from soda to soap.
"There has been more change in marketing in the last five years than the previous 30," says Bob Liodice, CEO of the Association of National Advertisers. Until recently, marketers had their choice of television, radio, and print, and they developed a good sense of how those media worked. Now, Liodice says, "technology has put the customer in control, and that's forcing marketing into newer forms." While advertisers are excited about the idea of better reaching consumers, the media landscape is changing so rapidly that there's still a lot of confusion over what's working and what's not.
Spending on alternative advertising rose 16.4 percent in the first half of last year, mostly on mobile and Internet marketing, according to research firm PQ Media. That compares with a bump of 4.5 percent during the same time in spending on traditional advertising such as television and newspapers. Cincinnati-based P&G, the nation's biggest advertiser, boosted its global ad spending 15 percent last year to $6.8 billion.
Young eyes. While old standbys account for the lion's share of advertising dollars, as companies get savvier, they will spend more on newer avenues such as cellphones and blogs, says Mike Kelley, a partner with PricewaterhouseCoopers Advisory. P&G says the Times Square toilets were the second-biggest chunk of Charmin's ad budget last year, behind television. While 425,000 people checked out the restrooms during December, the campaign spawned nine videos on YouTube, which attracts 20 million visitors a month. Most of those perusing the site are under 30, a holy grail for marketers looking to create customers for life.
About five years ago, P&G began rethinking how to make its advertising more relevant to consumers, who are now in the driver's seat in deciding when and where they want to see or hear a commercial pitch. The company shifted the way it handled advertising, focusing first on the idea rather than the medium. Instead of starting, say, with a new Tide TV commercial, P&G created what it calls a "media-neutral idea" that could be translated into several different marketing efforts. So far, the company has applied the media-neutral approach to 11 of its more than 300 brands.
For Tide, that idea is the detergent "works wonders on the fabrics that touch your life," something P&G hopes will resonate emotionally: a key ingredient for winning consumer loyalty. Shortly after Hurricane Katrina hit the Gulf Coast, the company loaded a beverage trailer converted into a laundromat and sent it to New Orleans to wash survivors' clothes. It began selling vintage T-shirts with sayings like "Be Seen, Not Spotted" and handed them to celebrities like Eva Longoria to promote Tide to younger customers. The result: In the past two years, P&G says, Tide had its best sales in a decade.
Coming up with a product's story and feel before a campaign also helps translate a brand's message across borders, something important for P&G, which does business in more than 160 countries, says Bernhard Glock, manager for global media and communications. "We're experimenting with different brands in different regions," he says. In South Korea, P&G has almost completely pulled out of television for Vidal Sassoon hair-care products except for advertising on a few niche channels. Instead, it has opted to spend money on promotions like a huge outdoor display at a Seoul shopping center. In Japan, it has heavily boosted marketing on mobile devices. And in Pakistan, the company created a superhero called Commander Safeguard, with his own television show, music videos, and website, to help sell Safeguard soap.
Still, traditional mass media aren't going away, says Kelley: "This is an evolution, not a revolution." But with better ways to reach customers, spending on more targeted marketing will definitely rise. Kelley points out that marketers spent $160 billion last year on direct mail with minimal response. "There is a lot of waste," he says, "and now they can make marketing more relevant to users."
One to one. While P&G bowed out of buying ads at this year's Academy Awards, Boles says that television is still the best way to reach lots of customers. It just doesn't necessarily translate into cultivating repeat buyers. So, companies expert at marketing like P&G are trying to build a relationship with customers, rather than simply chant a message that shoppers will tune out in a cacophony of constant advertising.
At the same time that improved technology is making it easier for customers to fast-forward through television ads, it's also helping marketers reach new audiences. Kelley says that customers, especially younger ones, now are more willing to give up information about themselves in exchange for lifestyle-oriented messages. It's a boon to companies that can figure out how to handle the exchange properly. Even online, people don't like being interrupted by a pop-up ad while browsing, he says. "And people don't want ads on their phones every three seconds." But if they choose to receive text messages, they may want to hear about a particular promotion or pick up relevant information. In the end, a company may reach fewer people with a certain campaign but get better results. It's a marketer's dream come true "to speak to customers on a one-to-one basis," says Liodice.
P&G discovered that online power in 1999 when it created Pampers.com. The site is loaded with information from the company's research on new and expecting mothers. Pampers sites are now in 49 countries. "Moms would rather be part of the Pampers community than get their diapers for 50 cents less," contends Liodice.
Last year, when it gave the Herbal Essences hair-care brand a makeover, P&G sold new bottles on eBay before they were available in stores. The bottles went for up to $25 apiece, and the proceeds were donated to charity. For its Crest Whitening Plus Scope Extreme product, P&G put up a quiz on MySpace last April rating what makes a person irresistible. More than 50,000 customers added the quiz as their "friend" on the site. For Valentine's Day this year, P&G let customers send a text-message or E-greeting "kiss" through its Scope mouthwash site.
Networking. Marketers are realizing that online socializing is not just for "techno geeks" anymore, says Forrester Research senior analyst Lisa Bradner. Research site eMarketer predicts advertising on social-networking sites will rise from 2 percent of total ad spending today to 9 percent by 2010. This year, P&G decided to launch two of its own social-networking sites to help gather customer information: Capessa for women on Yahoo! Health and the People's Choice Community around the People's Choice Awards.
Such open strategies have their risks. Customers can just as easily talk back using blogs and other instant technology. "The balance of power has shifted," says Bradner. Now if customers dislike a product, "they can get on the Internet and tell 2 million people about their experience." On the blog Commercials I Hate, posters have panned many P&G ads, from the ones for Gillette's five-blade Fusion razor to the Pepto-Bismol jingle. The advertising blog Third Way called watching P&G's online serial Sunset Heat to promote Escada perfume "more painful than reading Ulysses at the beach."
The idea of listening to customers rather than lecturing to them is a big cultural shift for most companies, says Bradner. It means that they "have to be comfortable with the idea of failure," she says. But because it's cheaper and faster to play around with new technologies, companies should "fail quickly and move on," she adds. In the past, a marketing executive might have already moved on to a new job by the time a company concluded a campaign wasn't working. Now it's possible to tell right away. As one Commercials I Hate poster said about an Old Spice ad revealing a man's chest hair, "You guys really have to catch this one before they realize how bad it is and stop showing it."
This story appears in the April 9, 2007 print edition of U.S. News & World Report.