P&G has overhauled how it works with agencies, reducing media waste by 20% and saving upwards of $1 billion in agency and production fees

Neil Hall/Reuters

Procter & Gamble chief brand officer Marc Pritchard thinks his crusade to overhaul digital advertising is working.
"We’ve really changed the way we work, and managed to save upwards of $1 billion in agency fees and production costs," Pritchard said in a recent interview with Business Insider.
Like other advertisers, P&G has taken marketing functions in-house, including media and creative.
He said the company has reduced media waste by 20% while increasing media reach 10% by gathering and using consumer data.
Visit BusinessInsider.com for more stories.

Procter & Gamble chief brand officer Marc Pritchard has been on a crusade to overhaul its digital advertising, whether it’s slashing spending or piloting new ways of working with agencies.

All that heavy-lifting is paying off in cost savings and better output, Pritchard told Business Insider in a recent interview.

"We’ve really changed the way we work and managed to save upwards of $1 billion in agency fees and production costs," he said. "We’re actually doing less work that’s more powerful."

Pritchard also pushed for brands exercising greater control at the Association of National Advertisers’ Media Conference Thursday morning, where he advocated for a "New Media Supply Chain" that focuses on quality, civility, transparency, and privacy.

"We’re getting our hands on the keyboard and taking more control of the New Media Supply Chain," he said.

P&G is piloting new media and creative models

Like other advertisers, P&G has taken marketing functions in-house to gain transparency, cost-effectiveness, and control over customer data.

On the media side, P&G has been building analytics and media planning capabilities and doing more media buying itself using the work of its data scientists and other specialists. In some cases, procurement specialists work across brands and categories, while in others, brands buy their media individually.

P&G is also gathering consumer data on its own platforms after obtaining due consent from consumers and in compliance with GDPR and other privacy laws. With this approach, P&G’s data management platforms now have over 1 billion consumer IDs worldwide, Pritchard said.

"We’re using that data to accelerate performance analytics, hiring our own data scientists, reducing media waste by 20% while increasing media reach 10% and pivoting to more relevant and effective one-to-one marketing," Pritchard said at the ANA Media Conference.

Last summer, the world’s second-largest advertiser after Samsung, according to AdAge’s Data Center, also began to take a new approach to creative. It’s limited agencies of record to fixed retainers for planned work each year so it can work with a changing roster of agencies. That change has reduced fixed retainer fees while producing good creative, Pritchard said.

P&G is also changing the way it works with agencies

The consumer packaged goods giant has also tried to get its agencies to work more closely, starting with its fabric care products including Tide and Downy in an approach it calls Woven Collaborative.

"We essentially took the best players from different agencies and put them together in one group," Pritchard said. "The goal is really to institutionalize creative collaboration."

In Woven Collaborative, staff from P&G’s outside agencies such as Saatchi & Saatchi and Grey work with P&G’s own teams on media-buying and digital planning.

Pritchard said the model was working, citing Tide campaign that aired during the NFL last fall and Downy’s new "Free & Gentle" campaign.

As a result of the Tide campaign, Tide ended up having the highest social share of voice of all Thursday night football advertisers and the highest share rate in Tide’s social media history, according to the company.

"We’ve put some pretty high expectations on our agencies and essentially reinvented the model," said Pritchard. "We want to pay for great creativity and great creatives; we don’t want to pay for excess overhead."

NOW WATCH: Watch Google’s Stadia video-game-platform event in 5 minutes