- Jul 20, 2016
- 6,572
- 20,209
Mad Men would have loved the internet advertising age. It is full of murkiness, bots, and mystery revenues. P&G is one of the largest corporations in the world, so when they do something, everyone else pays attention. Seeing a slow revenue growth, the company looked to ways to cut expenses and settled on their internet advertising.
When a corporate giant cuts costs, it cuts the revenues of other companies. ... And it did. Its “selling, general, and administrative expenses,” which include advertising and marketing, fell 7% in the quarter. Net income jumped 12%. And digital advertising took it on the chin...
It looks like the leaders at P&G are getting off the train to Crazy Town and looking at the reality of consumer spending, which has remained constant over the past 5 years in the US. If the wonders of targeted advertising, which supposedly is the reason for collecting vast information from internet users, really works, then companies who participate should see greater rewards. They are not.
This bit of news is important because it shows a major company backing off reliance on third-party companies that seem to just take a piece of the pie without providing an actual service. This whole concept of money for nothing has been one of my pet peeves for a long time because the burden of funding these companies falls on those of us at the end of the line.
CEO David Taylor told the Wall Street Journal: “We got some data that said either it was in a bad place or it was not effective,” Mr. Taylor said of the digital cuts. “And we shut it down and said, ‘We’re not going to follow a formula of how much you spend or share of voice. We want every dollar to add value for the consumer or add value for our stakeholders.”
The article is an interesting read.
http://www.zerohedge.com/news/2017-07-29/pg-slashed-digital-ad-spending-what-happened-next
When a corporate giant cuts costs, it cuts the revenues of other companies. ... And it did. Its “selling, general, and administrative expenses,” which include advertising and marketing, fell 7% in the quarter. Net income jumped 12%. And digital advertising took it on the chin...
It looks like the leaders at P&G are getting off the train to Crazy Town and looking at the reality of consumer spending, which has remained constant over the past 5 years in the US. If the wonders of targeted advertising, which supposedly is the reason for collecting vast information from internet users, really works, then companies who participate should see greater rewards. They are not.
This bit of news is important because it shows a major company backing off reliance on third-party companies that seem to just take a piece of the pie without providing an actual service. This whole concept of money for nothing has been one of my pet peeves for a long time because the burden of funding these companies falls on those of us at the end of the line.
CEO David Taylor told the Wall Street Journal: “We got some data that said either it was in a bad place or it was not effective,” Mr. Taylor said of the digital cuts. “And we shut it down and said, ‘We’re not going to follow a formula of how much you spend or share of voice. We want every dollar to add value for the consumer or add value for our stakeholders.”
The article is an interesting read.
http://www.zerohedge.com/news/2017-07-29/pg-slashed-digital-ad-spending-what-happened-next