Procter & Gamble Co (NYSE:PG) has revealed that its decision to cut digital advertising spend by over $100 million in the quarter ending in June had insignificant impact on business and thereby proved the ineffectiveness of the particular digital ads. Nearly all the advertising cuts for consumer products were in digital according to the chief financial officer of Procter & Gamble, Jon Moeller.
The digital ads that were targeted were those likely to appear on websites whose content was objectionable or those likely to appear on websites which contained fake traffic emanating from bots.
“What it reflected was a choice to cut spending from a digital standpoint where it was ineffective, where either we were serving bots as opposed to human beings or where the placement of ads was not facilitating the equity of our brands,” said Moeller.
Cutting wasteful spending
According to the chief executive officer of Procter & Gamble, David Taylor, the cuts in digital ad spending constitute part of a broader push to stop spending on items that bring no value to the company. Ineffective product development programs are also on the chopping block as the company moves to ensure every dollar either adds value to shareholders or to consumers.
According to information provided by Kantar Media, Procter & Gamble’s spend on advertising in the United States was $2.45 billion. The company whose iconic brands include Pampers, Tide, Crest and Bounty has for a long time been the world’s largest advertiser. A year ago Procter & Gamble disclosed that it would avoid Facebook Inc (NASDAQ:FB) ads which are highly targeted after discovering that the strategy limits reach and is consequently not highly effective.
TV networks working to lure advertisers back
By reducing its digital ad spend, Procter & Gamble did not, however, indicate whether the budget was shifted to other media such as television. In the recent past television networks have been arguing that advertisers have been making over allocations in digital advertising at the expense of television and that the situation needs to be reversed.
In Thursday’s trading session shares of Procter & Gamble edged upwards by 1.55% to close the day at $90.68 a share.
