Scrimp & splurge: of P&G’s strategy in trying times

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Came across this piece in AdAge talking about P&G’s strategy during trying times: scrimp & splurge. The world’s leading advertiser is aware that consumers are likely to tighten their belts during these inflationary times. But the response from P&G is heartening: instead of cutting down on advertising spends, they are committed to spend roughly 10% of sales on advertising, as always. A G Lafley, Chairman-CEO of the company indicated that they are are scrimping on overhead, including thinning ranks of senior management from around 360 to 300 “using retirements and resignations for the most part.” Awesome commitment to marketing & advertising.

Global Marketing Officer Jim Stengel said: “At a time when people are under pressure, the value of our brands is more important than ever, so why would we stop communicating about the value and quality of our brands? It’s more important to be communicating in these times than ever.” Couldn’t have agreed more.

These two gentlemen have been the force behind P&G’s revival in the awards circuit over the past 5 years. No wonder that they were awarded ‘Advertiser of the Year’ at the last Cannes Festival. Speaking of awards, another telling comment from that article is about how difficult it is create ground breaking work on seemingly mundane products like detergents. As the CMO of Unilever said: “Anyone can make a compelling road-safety film or a pro-bono thing for child abuse. Actually, it’s a much tougher, greater challenge to work on a lavatory cleaner or a deodorant. … It may be great to win a gold for something seen three times at three in the morning in Oslo, but actually it’s more gratifying if it’s something seen on prime-time TV in dozens of countries.”

Which is why I was disappointed that brands like Bingo! did not sweep the awards at Goafest. Stuff like soaps, biscuits and hair oil suffer so much from self-inflicted ‘category codes’ it is rare to find refreshingly new work in such categories. The recent work for Ponds at least attempts to be different.

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