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Procter & Gamble pulling back on targeted Facebook ads

P&G

One of the world’s biggest companies has decided that targeted ads on Facebook really aren’t so targeted. Procter & Gamble is moving away from targeted ads on the social media giant, saying that hyper targeting on Facebook did not prove as effective as the company thought it would be.

P&G is the biggest ad spender on the globe, with a reported $7.2bn ad budget in 2015, and is constantly trying new avenues, but the road taken down targeted ads proved too narrow a focus and did not reach the audience the company hoped for, according to a recent story in The Wall Street Journal.

Marc Pritchard, global marketing officer at P&G, told the Journal that the company would not be cutting back on Facebook ad spending overall, but that “we targeted too much and went too narrow.” He went on to say that P&G is looking to find a balance between getting the most reach with the right precision.

What effect this public change will have on Facebook is unclear. The social platform prides itself on its ability to grasp and grab unique user demographics to deliver advertisers their ultimate targets. P&G’s decision certainly didn’t condemn the practice; it just stated that it didn’t work for them. Perhaps it’s because P&G serves so many different brands and casts such a wide net for consumers that niche targeting just didn’t prove effective enough to continue with the ad spend.

Facebook will be just fine, however, since its ad revenues are growing. And it recently used new technology to bypass ad blockers on desktop.

P&G, like many larger brands and umbrella companies, will most likely go broader, including efforts on Facebook. As stated, the amount spent by P&G on Facebook will stay the same, but it is simply cutting back on niche targeting. The company will use some targeting on social and will complement that with a larger spend on television.

However, David Indo, chief executive at ID Comms and fomer marketer at Coca-Cola and Nike said it's also a clear indication that even the best resourced and most sophisticated marketing-led businesses are still figuring out how to use digital.

"The ability to be highly targeted provides huge benefits to advertisers, not least in minimising wastage against the audiences they're trying to reach, but with that often comes a significant increase in cost per unit," said Indo of the move.

"One of the questions that large FMCG brands like P&G have to ask themselves is; is the increase in cost per unit offset by a greater or at least comparable increase in performance? In this case, the answers appears to be no."

Ad partnerships are constantly shifting, and targeting is still a technology that is taking shape, so expect that the long-running partnership between P&G and Facebook to continue as technologies evolve.

From an agency point of view, Simon Law, chief strategy officer at digital agency Possible London said he was "relieved" to see this happening after years of frustration watching brands waste money on social doing either pointless trivia or overtly self-promotional activity.

"Social doesn’t break all the rules of marketing, but it does mean that you’re in a channel that enables the audience to react to you and you’re trying to grab attention against their friends showing off or sharing, their family updates, the reactions they’re getting to their own posts and everything happening around them," said Law.

"When they’re scrolling at speed with their thumbs, on their phones, that’s a harsh environment for brands to compete for attention. At the same time, the metrics we’re seeing directly are often ones that don’t impress CFO’s – what is a ‘Like’ worth, really? No wonder the investment is being questioned."

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Kyle O'Brien

I am a reporter for The Drum covering a wide array of topics but always trying to tell the best stories possible. I am a former west coaster from California and Portland, Oregon, now living in Pennsylvania — with time spent in NYC each week.

I also play saxophone professionally.

All by Kyle