In a move that has the American advertising industry buzzing, consumer products giant Procter & Gamble is now spending more than a third of its advertising budget solely on digital media. The bold shift in strategy comes at a time when studies show that for the first time, Americans will spend more time online than watching television this year.
While most companies spend around 20% to 25% of their marketing budgets on digital advertising, P&G’s CEO A.G. Lafley says that P&G’s spending on ads created exclusively for advertising online or on social media falls between 25% to 35%; with the top of that range being the norm for its digital efforts in its biggest market, the United States. The move shows an emphasis on strategically placing ads in the right place for the right people.
The World of Advertising is Evolving
“The bottom line is we need and want to be where the consumer is, and increasingly that is online and mobile,” a P&G spokesman said. As the recession leads increasingly mobile consumers to spend their money wisely, the opportunity to market to a larger audience online is becoming more apparent.
Though many in the industry still tout the television as most supreme in the world of advertising, P&G executives say advertising via digital media is faster, cheaper and offers more immediate feedback. As one of the largest companies in the U.S., P&G is founded on extensive customer research and quality products that are marketed heavily in television ad campaigns. The efforts are paying off big time with P&G’s last fiscal year netting the company a reported $84 billion in total sales. According to eMarketer, spending for digital ads will increase by 14% this year to $41.9 billion dollars nationwide. The figure is more impressive when compared to the rate of spending for television ads, which are expected to grow by 3% to $66.4 billion.
However, the eMarketer study shows that perhaps the biggest digital marketing goldmine seems to be on the mobile devices which Americans spend an average of two and a half hours on each day, not including talk time. The figure reflects an increase in the usage of mobile devices by one hour compared to last year’s numbers. Whether or not P&G’s gamble will pay off big time remains to be seen, but in the meantime, one thing is glaringly certain: advertising in America is quickly becoming a whole new ballgame.
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