If you are as confused as most about what (if anything!) is working when it comes to advertising, look no further than the World’s biggest advertiser: Procter and Gamble.
With a $10billion annual budget, they really must know their onions (or rather, laundry products), don’t you think?
They have increased their ad spend by 24% according to Jon R. Moeller (P&G CFO) over the last 2 years, but sales have apparently not increased as much. As a result although they plan to increase ad spend, it will be “more in line with sales growth”.
So, if their ad spend is increasing faster than growth, then what exactly is going wrong?
Robert A. McDonald (Procter and Gamble CEO) said on Seeking Alpha: “we’re quickly moving more and more of our businesses into digital”, to which he added: “with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient”.
Notice the use of the unqualified word ‘much‘.
Clearly P&G understand that digital is vital. They also have a ratio of advertising budget to sales of historically around 9%. But it has been increasing and appears to be closer to 11%.
So what does it all mean? Well, first off, McDonald says he is absolutely committed to advertising. But as the largest spender on advertising, they must surely be testing everything they do?
It is interesting to note then that they also announced they would be laying off 1,600 staff, many of whom are marketers.
Reading between the lines, I would guess it is because print, tv, radio and other traditional forms of advertising are just not working as well any more, and their marketing department has either been slow to cotton on, or they have been made the scapegoats.
Either way, it is all you need to know about which form of advertising is the way ahead. So my advice is to not just look into organic SEO promotion, but also PPC, PPV, CPA and a whole bundle of other paid for digital advertising methods.
Microsoft are undergoing a strategic alliance with Yahoo to join forces to fight Google’s monopoly in online advertising. That has an ETA for completion of April 2012. Get in now and learn the fundamentals.
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