Dive Brief:
- Procter & Gamble is testing the idea of Performance Marketing Retail Partnerships and asking retailers across Europe, India, the Middle East and Africa to share their customer data to help the company target ads, Digiday reported, citing a P&G executive speaking at the IGD Conference in London.
- P&G could leverage retailers’ loyalty-card data to optimize ad campaigns to target customers who shop at specific stores, which could increase the chance of a customer making a purchase at the location. According to the report, P&G would add the customer data to its data management platform to build a “makeshift ID graph” to target audiences.
- Retailers may be reluctant to share customer data under the General Data Protection Regulation in effect, with many concerned that the data could drive sales for competitors. Amazon, a main sales platform for P&G, will not share that level of raw data, according to the report.
Dive Insight:
The effort by P&G to improve its programmatic campaigns follows efforts by the company to rework its digital marketing strategy to create more efficiencies, save money and boost transparency. While retailers have long been reticent to share customer data — seeing it as a key strategic advantage in negotiating co-marketing deals and as brands build their direct-to-consumer ecommerce sales — the consumer-packaged goods giant and world’s largest advertiser is positioning the data exchange as way to help retailers better drive sales.
P&G is clearly trying to take more control over its programmatic strategy and drive efficiencies by using retailers’ customer data. By 2019, nearly two-thirds of all digital display ads are expected to be programmatic, reaching $84.9 billion, according to 2017 estimates by Publicis Groupe Zenith. Global programmatic ad sales were expected to hit $57.5 billion last year and are growing 21% annually. However, some marketers have questioned programmatic’s effectiveness, since many lack control over where ads appear online.
P&G cut its digital ad spend by $200 million last year, after seeing that its ads were not effectively reaching its target audiences, according to Reuters. The CPG marketer has used third-party data to reduce the frequency of ad delivery by about 10% and reinvested the savings to increase media reach. Additionally, the company brought more marketing functions in house and has been piloting new agency models.
The news comes at at time when ecommerce is becoming a key focus for CPG brands, accounting for 6% of P&G’s sales or $4.5 billion, according to the company, which expects that portion of sales to grow to account for 30% of business by 2021, per the Digiday report.
