P&G slashes adspend by $350m after cutting 'waste' and agency fees

Industry Contributor 12 Aug 2019 - 3 min read

P&G slashes adspend by $350m after cutting 'waste' and agency fees

By Paul McIntyre - Executive editor

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Procter & Gamble continues its three-year hack into agency fees and ad spend 'waste', including reducing "excess frequency" in its media supply chain (Campaign).

Key points

The US FMCG giant has cut nearly $500m in ad expenditure since 2016
In the past 12 months it made the deepest cut of $350m to its annual advertising expenses
P&G CEO David Taylor said on an earnings call last week P&G was investing more in performance marketing
P&G has built up a database of 1 billion consumer IDs
The cuts to agency fees is likely linked to Publicis Groupe's announcement that it took a 0.75% hit to group revenue, worth upwards of $50m from one unnamed FMCG client that cut its remuneration deal.

Unilever and P&G are the most public examples of big marketers cutting into their marketing and media supply chain costs - further signals of the industry crimping underway to media and agency partners. Of particular interest is the 1 billion user IDs that P&G says it now has in its database, and how the company is using it to lower paid media ad frequency to individuals. There's a lot of learning still to do but industry at large tends to follow P&G's lead so brace for more belt tightening.