One of the world’s largest companies is moving away from outbound marketing in its own best interest.
Every since The Great Depression, Procter & Gamble has practiced the rule of not reducing advertising budgets during times of recession. As a matter of fact, P&G has made progress in every one of the major recessions and that was no accident. When their competitors were swinging the budget axe, P&G actually increased their spending on advertising. While the Depression and later recessions caused problems for many, P&G came out of them all unscathed; and whenever the economy was down, they ramped up their advertising again.
That practice worked for Procter & Gamble for the past 80 years. But times have changed, now social media rules, and the international giant has been forced to make a drastic transformation in its marketing practices in just the past few weeks.
The $10 billion annual marketing budget had begun to hurt the company’s margins, and in an already poor economy, P&G has chosen to lay off 1600 of its own staffers in a sweeping cost cutting exercise – many of the staffers are marketers – and are now focusing their marketing on inbound practices, particularly Facebook and Google Plus. Their CEO Robert McDonald stated that he has chosen to “moderate” his ad budget because Facebook and Google Plus are “more efficient” than the traditional media practices of the past that usually ate up the major portion of his ad budget.
What does this mean to you? The giant corporation of Procter & Gamble always chose to increase advertising during terrible economic times, and in doing so beat out their competitors every cycle. In the past two years, the company’s marketing spending is up 24%, despite only a 9% sales increase in its 2012 Q1 earnings and a 6% sales increase over those same two years. P&G saw that it was time for a change. If they recognized and decided to take better advantage of free marketing through social media sites like Facebook and Google Plus, shouldn’t you?
If you’d like to learn more about how you can integrate social media into your marketing this year, give me a call.
Micki – your web gal
connect@michelleharbour.com
804.642.2363
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