When Marc Pritchard, Procter & Gamble’s chief brand officer, addressed the 2,700 attendees at the Association of National Advertisers’ Masters of Marketing Annual Conference in Orlando, Fla., last week, he mentioned how working with ecommerce players Amazon and Alibaba has helped accelerate P&G’s $3 billion ecommerce business while also reducing digital ad waste by roughly 20 percent. Adweek sat down with Pritchard after his ANA talk to learn more about how P&G’s relationship with Amazon and Alibaba, creepy ads, what mass one-to-one marketing actually is and how long it’ll take to get there.
Adweek: Tell us a bit more about mass one-to-one marketing and how P&G actually does that.
Marc Pritchard: The next big transformation that’s coming is mass one-to-one marketing. It sounds like an oxymoron. But … we still have to get mass reach because our audiences are people who brush their teeth, wash their hair, pretty much everyone. So you still need mass reach, but what we’re going to do is do it with greater precision so we don’t have excess frequency, because that’s annoying, but also [advertise]when there’s a higher propensity to buy.
The beauty of having consumer ID data, where you know it’s an individual and that’s what Amazon has, what Alibaba has, is that we can work with them to find when is the best time to be able to reach someone with an ad or with a video or with a purchase incentive. That’s what we’re doing. It’s really propensity modeling so you can reach people. Then what that does is increase the rate of conversion, eliminate the excess frequency that’s waste, and you end up increasing the amount of purchase and cut out about 25 percent of the waste.
When will this transformation happen?
We’re at the beginning of the transformation, and every 18 months, with the doubling of computing power, we should expect it will reach new levels of performance.
But how do you actually do that?
What it allows you to do on their platforms is reach [consumers]when it matters and not reach them when it doesn’t. … When you go on Amazon or Alibaba we know that you bought the Oral-B Power Toothbrush six months ago and if you’re in there potentially searching we can then reach you and say, “You might want to consider that it’s time for a refill.” If you buy it then what we won’t do is then come back the next time [you log onto Amazon or Alibaba]and bombard you with stuff because we know you bought it. That makes the ad experience better because that’s what we all hear people saying, “Gee, I bought some shoes and now I get a shoes ad every time I’m on anything.”
What this allows you to do, and what is really fascinating about this transformation, is that it really is a better experience for consumers because you’re connecting with people when they need it, not when they don’t. … It’s a more precise connection and it reaches someone when they want something rather than just bombarding them. The scourge of the industry is excess frequency, waste from excess frequency.
Tell us a bit more about how that relationship with Amazon works. How deeply are you working with them?
Without getting into anything proprietary … the Amazon team, the P&G Amazon team, and our brand teams work together to figure out what we need to do to drive growth, how many users do we need, what are some smart ways to make it happen, what are some experiments we want to run, and then we run them. [For example, we have] these Tide ads that can identify who you are, what you’ve bought, where you might be in the purchase cycle and feed you the right ad that’s going to be the highest propensity ad for you to convert.
But how do you do that and not have it be creepy?
What we’ve found is creepy is when you buy some shoes and they keep showing up with shoes ads everywhere. Utility, usefulness is, I get an Oral-B Power Toothbrush ad when I need it. So it’s respectful as opposed to annoying. … That’s one of the biggest problems for consumers. We’re trying to deal with consumer pain points and some of the consumer pain points are excess frequency, annoying ads, targeting [consumers]when [they]don’t need something. We’re trying to solve that problem. And solving that problem then moves it away from the creepy factor.
What do CMOs need to know about Amazon and Alibaba?
They do have a wealth of consumer data because it’s consumer purchase data and that’s powerful. [Brands must] figure out how to work with them and generally innovate in order to build their category. What retailers care about the most is their categories grow. They know there are a lot of competitors out there. What’s important is that you drive the growth of the market.
[As market leaders], how do we drive the market? Especially when you have between 30 and 60 percent share of the market you kind of are the market so you want to drive that market. That’s really what retailers care about. There may be 20 or 30 competitors but that doesn’t matter to them. What matters to them is, is their category growing? How do you drive the market and drive the market in these categories as well?
A lot of people have great debates about if brands are going to make it on Amazon and Alibaba. We’re actually finding their fairly limited assortment platforms and big brands are good for limited assortment platforms because they are the most purchased so they rise to the top. So when you search laundry detergent, the first two, three, four are P&G brands. Tide, Gain. How many people go to page six?
That’s the other thing I would say: Think about driving category growth. If your brand is big then you have a much higher probability of driving business on those platforms.