In this week’s episode of #MediaSnack David and Tom discuss the the rallying cry issued by Procter & Gamble CMO Marc Pritchard at the IAB Annual Leadership Marketing conference.
They argue that change is now coming to the digital ad market. That much can be assured in 2017 because Procter & Gamble has decreed that it will no longer put up with the ecosystem as it works today.
Global brand building officer Marc Pritchard told the IAB that he and his company were calling time on current practices. Anyone who wanted P&G money would have to make radical changes by the end of the year.
Central to his critique of how the industry works was the need to deliver transparency, reform supply chains, adopt common standards on viewability and open up to third party metrics.
He accepted that advertisers had to take some of the responsibility for the current situation – even P&G had accepted compromises in the race for digital firsts – and most had demanded cheap media and lowered fees.
The message was powerful not just because it was delivered at the IAB – around a third of total ad spend goes on digital – but also because of the way it was delivered. The tone was calm, considered but also exasperated and defiant. The challenge was put into the context of the fundamentals of marketing and the challenges for P&G to drive a business outcome.
Tom and David argue that Pritchard’s words carry great weight, not only is he the CMO of the world’s biggest-spending advertiser but he’s also just taken over as president of the US ANA.
Many marketers across the US were looking for leadership following 2016’s media transparency bombshells. Some are confused by the sheer complexity of the challenge and don’t know where to start. P&G’s public roadmap helps them identify the first wins on the journey to a better relationship.
While this a P&G initiative it’s also a call to action for the industry. Other companies now have an obligation to act – and many already are quietly making changes to the way they operate.
His willingness to accept some of the blame for the current situation was welcome but he called out agencies acting as principal but admitted that they had to do so because the “fee doesn’t cover your expenses”. Agencies may have been acting in within the wording of the contract but that doesn’t mean they should have behaved in this way.
The question the industry needs to answer is how other marketers should respond, particularly those that don’t have the resources and budget leverage to make the likes of Facebook and Google behave differently.
ID Comms has been promoting the notion of 2017 as a year of #mediachange and invites everyone to participate with their own thoughts and comments. Future editions of #mediasnack will address those contributions.
Central to Pritchard’s manifesto was the wider notion that brands needed to change their agency or change their contract to ensure new behaviours become established – while some will pitch their account, others might go down the renegotiation route.
Marketers also need to look in the mirror and consider not just their contract rights but also their behaviour as a client to the agency. CMOs need to ask themselves: “am I clear about my KPIs, the scope of work and am I paying the agency fairly for the value they create?”
True media change say Tom and David, is about more than just negotiating new terms, marketers need to consider their media governance model, and whether they view media as an investment in growth or a cost to be managed downwards.
It’s also worth noting that while Pritchard’s comments were broad, they were especially focused on the digital media business and the supply chain. The ANA’s own research said that bad practice was pervasive across TV, Print and Outdoor, not just digital.
Expect future Pritchard outings, notably the keynote at the ANA’s Media Conference on March 2, to apply the same scrutiny over the “non-digital” media supply chain.
The right answers for P&G won’t be right for all advertisers but Pritchard has said the previously unsayable and every CMO should consider his words carefully. Because if P&G can get it so very wrong then so too can every other client.
