MarketingDive – The news is particularly noteworthy because of the size of the marketers involved — P&G is the world’s largest advertiser and Unilever is no slouch when it comes to investing in ads — and therefore could impact the bigger picture if the downturn continues or if other brands follow suit. The development is also a departure from recent forecasts for digital ad spending in 2017, which have mostly painted a rosy picture, At the end of March, Magna predicted slower overall ad revenue growth this year although the company was bullish on digital ad spending. More recently, IAB reported digital ad revenue hit $19.6 billion during Q1, up 23%.
It is not clear yet whether a retreat from digital reaches beyond these two marketers or whether it is a short-term trend reflecting the marketers’ reticence to invest in digital right now given their concerns over brand safety and a lack of transparency.
At this year’s upfronts, P&G announced its intention to invest a large portion of its ad dollars in linear TV, although networks might not be overly pleased with the move as P&G has legacy deals in place that guarantee it low price hikes on already low base costs for linear TV ads.
Unilever, while cutting back on ad spending, is still investing in digital. In April, Unilever announced it was making a 30% cut in its ad strategy along with a 50% reduction in agency relationships. A big part of the plan was to reduce the number of ads it produced that never actually get used in campaigns. More recently, Unilever, along with WPP, invested in $15 million in digital ad creative platform Celtra and plan to leverage its technology across the marketer’s global marketing organization.
Additionally, Adexchanger reported a statement by Unilever CMO Keith Weed during a Cannes Lions roundtable: “Get out of marketing if you’re not going to be a great digital marketer. We’re doing quite a lot in-house. I think marketers are going to have to be much more data-savvy.”
Interestingly, MediaRadar’s estimates come at a time when Pritchard recently went on the record at Cannes Lions stating the industry is making progress in cleaning up the media supply chain and is 40% to 50% towards completing the task with Pritchard adding he is hopeful the effort will be finished by the end of the year. He said the next challenge facing the industry is content and publishers’ responsibility to provide quality content where brands ads appear.
- According to MediaRadar data reported by Business Insider, consumer packaged goods giants P&G and Unilever reduced their digital advertising budgets by 41% and 59%, respectively, between January and May of 2017 compared with the same period a year ago.
- P&G reduced the number of sites where it ran ads by 33% for a total of 978. The company ran ads on many of same sites during both time frames, but this year it reduced spend on 560 of them. Unilever is advertising on 11% fewer sites this year for a total of 540. For the sites where it ran ads during both time frames, it reduced spend by 57% on 155.
- P&G and Unilever have both been vocal in demanding more transparency in the digital media supply chain. P&G Chief Brand Officer Marc Pritchard went as far as to demand its digital ad partners including Google and Facebook offer Media Ratings Council accredited measurement by the end of 2017 or lose P&G’s digital ad business.
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