When 5 Billion Customers Shift Their Habits, You Shift With Them.
How Marc Pritchard works with Google, Facebook, and Snapchat to help P&G transition to a new world order
If you’re a senior executive running a massive American consumer goods corporation, there’s plenty to keep you awake at night. Customer behaviors are shifting dramatically, and nimble startups, devoid of legacy business practices, are growing larger in your rear view mirror. Traditional mass market approaches to marketing and brand building, once centered around three networks and a strong creative brief — have fractured into an algorithmic tangle driven more by math and data than ideas and narrative.
And if the startups and the data aren’t enough, there’s the law of large numbers: Wall Street demands growth, and growth is hard when your revenue base exceeds hundreds of billions of dollars, and your core markets are flat to down.
Marc Pritchard knows the pressures of a C-suite executive — he’s been a senior operating officer at P&G for more than a decade. Pritchard has overseen marketing at the consumer packaged goods giant since 2008 — the moment the iPhone, Facebook and Twitter emerged, just about the time the pace of digital change hit a major tipping point.
Google and Facebook are now used by roughly 2 billion people on a regular basis. But almost 5 billion people use a P&G product. It’s annoying when your phone dies. But running out of Pampers at 3am is something all of us are deeply motivated to avoid.
And as Pritchard knows, it’s one thing to oversee marketing spend at a major corporation, and quite another to be the man who spends the most money on advertising in the history of business, just as the marketing landscape is changing completely.
For the past five years, I’ve worked with Pritchard and his team to convene Signal P&G, an event featuring technology and marketing’s best and brightest at P&G’s headquarters in Cincinnati. In the week following Signal’s fifth edition, Pritchard traveled to the San Francisco Bay area and sat with me to discuss the challenges of running a brand-driven business in the age of Snapchat, Dollar Shave Club, and Oculus Rift. What follows are both the transcript and video of our conversation, edited for length and clarity.
John Battelle: P&G is one of the world’s most admired companies, but I sense you aren’t entirely content with the state of P&G.
Marc Pritchard: We’re in the middle of a pretty major transformation, and the interesting thing about a company that is almost 180 years old, about every decade or so, we go through a pretty major transformation.
Whenever the consumer changes dramatically, we need to change. When the printing press got invented in the 1880s, we started connecting with consumers through newspaper advertising. When radio was invented in the 1920s, we connected with people that way. TV in the ’50s, we connected.
The digital world has been transforming things for about 20 years, but it really started to hit in the inflection point about five years ago. That is in conjunction with a number of other things that hit us. The financial crisis changed the economic environment, and really caused us to take a hard look at ourselves.
We’re transforming. We’re focusing on our 10 core (product) categories. As you know, we’re in the middles of divesting several of our businesses and focusing on categories that are the everyday household and personal care products that we really know well. These are number one brands like Pampers, and Always, and Tide, and Ariel, and Pantene, and Head and Shoulders, and Gillette, and Crest.
When you say you want to transform, and it’s related to a shift in the way the consumer behaves, what does that shift look like from the consumer standpoint, and what does it look like for the company?
In my world, which is the brand-building world, it’s dramatically changed. When digital technology started maturing to the point where consumers were constantly connected, whether it be first by desktop, now of course by mobile, that changed the way they communicate with each other, and the way they connect with brands. Over the course of the last few years, the advertising world started really transforming. It’s changed our advertising model completely. When I started in this role, probably 98 percent of our advertising was in TV.
What is it now?
About a third of our advertising is in digital. We still have a fairly high amount, 60 percent or so, in the TV world. That’s a pretty big shift, as you can well imagine.
Just to give our viewers a sense of the scale you’re talking about, worldwide what is a ballpark number for the amount of dollars you spend on marketing?
I can’t give you an exact number, but we’re the world’s biggest advertiser. We literally serve between four-and-a-half to five-billion consumers around the world.
That’s a very large platform.
That’s a very large platform. These are products that people are using every day.
This must guide your approach to working with innovative companies and products coming out of the Valley. You need partners here who can really scale, right?
Yes. When I first started in this role, we had little bit of a relationship with Google, because we were doing some search work. They hadn’t bought YouTube yet. We just started to get interested in Facebook. In 2007, we ran our first ad with Facebook. They had like 9 million users.
The first time I came out and met with Facebook, they had 100 million users. Then about two years later, they hit about 250 million. Sheryl Sandberg started working there. I remember I called her up. I said, “Sheryl, you guys are getting really interesting now, because you are at 250 million users. You are now a mass medium. Let’s figure out what we can do on a broader scale.”
We brought her to Cincinnati. She spoke with our entire leadership team. We there made a declaration that every single one of our brands was going to grab a Facebook page and get started.
A couple of years later, they were talking about gathering fans. I said, “Sheryl, the most fans we can aggregate at any one time is 10 million. That’s not going to be useful. You’re going to have to get into an advertising model.” We started working with them to get into an ad model.
“Sheryl, the most fans we can aggregate at any one time is 10 million. That’s not going to be useful. You’re going to have to get into an advertising model.”
They sure found an ad model.
They did. They figured it out. They reach 1.5 billion people, while also, importantly, maintaining a great user experience.
A year ago we got together with Snapchat. They didn’t have any ads then. We said “Let’s figure it out.”
I think it’s interesting that one of the first things you did with Facebook is to have Sheryl out to your headquarters in Cincinnati. I’ve been fortunate to work with you and your team on the Signal event you do every year in Cincinnati. What is the purpose of your Signal event?
The purpose of the event is to bring in the best minds — it started in digital, and has now evolved to brand building and commerce — to bring the best minds to inspire and educate P&G employees, to learn how to become the best at brand building in this new world. It’s really propelled us forward. People can see what good looks like, and then go out and try things.
When you think about innovation at a large company, one of the things you have to temper is the tension between trying new things, but with the requisite that you need scale. How do you identify a company that you can scale with? It’s almost like you’re a venture capitalist, trying to pick a winner.
The best way to do this is first start with our business units, our brands. Our brands then figure out a consumer need that we need to meet, and/or a business hypothesis. Then we scan startups — which might be available to help us out? We always advise startups to think about the consumer interaction with your particular platform, because if we understand that, it’ll help us work together. I’ll give you a great example — Snapchat.
You had the CEO, Evan Spiegel, speak at Signal last year.
We had Evan last year and why? It’s because we saw that that was the platform that was starting to get near scale…
So an invitation to Signal might be a ticket to a partnership with P&G?
When we pick somebody who’s coming to Signal, usually because we think they’ve got some potential, and once Snapchat was starting to get closer to a hundred million users, we said, “OK, now you started to become a mass medium,” not the least of which is in fact that my daughter uses it all the time.
In any case, what we did with Evan in the Snapchat team is we really wanted to understand first how do people use it, why do they use it, what is the experience for the user, and how do we maintain the integrity of that. Then (the Snapchat team) helps us figure out how we might create some kind of an advertising experience. We work with their creatives to be able to do a number of different products or ads.
Often tech companies have a history of saying “It’s my way or the highway, here is our ad unit.” Are you finding that startups now are saying, “Let’s talk about the best way to execute the idea of advertising on this platform”?
Yeah, the winners are the ones that do that. That’s what why a Facebook joint business relationship became so successful — because we deeply understood how the user used it. We wanted to go into video for several years, we pushed them, and of course they knew they have to get into video. But what they helped us understand is that the user experience is, you’re whipping through your feed, so it’s 1.7 to 3 seconds (per video). We need to now figure out how to do that.
P&G is the best in the world at making a 30-second television spot. Your spots are emotional, they’re tearjerkers. So part of the transformation is asking how you understand consumer behavior that isn’t about lean back and give me the 30-second ad, but lean forward and hook me in 1.7 seconds?
That’s the beauty of how technology has enabled great creativity, and at the center of everything is of course the consumer experience. Then we have to bring great creativity to whatever media platform, technological platform exists. We’ve created this console called the Creative Canvas …
The Creative Canvas was the focus of your speech both at Cannes and at Signal.
Exactly, because the idea there is that you have all these mediums now where you can express different aspects of your brand’s personality. What you want to do is think about how to express your brand as a masterpiece across this wired Creative Canvas.
That’s going to include 30-second ads, that’s going to include two-minute, three-minute videos. It’s going to include five-second, six-second videos. It’s going to include three-second videos. It’s going to include posts. Eventually, it will start to include virtual reality and chat bots and texts and VR.
I imagine that this causes a bit of anxiety, because you have an entire infrastructure built to execute television ads. It’s entirely different to have 15 different types of creative across many different media. In your talk at Signal, you said, “We made a lot of crap.”
That’s part of facing reality. The one thing you learn from the world we live in now is that you’ve got to be straight about things and assess when you’re good and when you’re not, and then pivot and change. In that shift there were a few things that we did that weren’t that great.
In fact, I joked about this, which is that I guess we thought in the real time digital marketing age what we needed to do is just produce thousands and thousands of ads and change them exponentially all the time. Unfortunately, that produced a lot of crap, and so we stopped the noise, decided to raise the bar on creativity, focus on what is the brand idea, what does the brand stand for, and then find ways to express that brand based on how the user is going to interact in that particular medium.
But make sure we always elevate the creativity. Most of the crap is when you put something out there where the brand doesn’t matter, and it’s either entertaining for entertaining sake, or it’s just a conversation. I showed some posts (during my talk) like the Pantene Cinco de Mayo post, enchiladas and beans, and that has nothing to do with Pantene. It had something to do with Cinco de Mayo, but nothing to do with Pantene.
Always Like a Girl is a great example and that’s a three-and-a-half-minute video that we turned into a 60-second ad for the Super Bowl, and we turn it into a six-second ad for Snapchat, brilliant, across our platform.
The idea of platform is very important here. You talk about a core benefit or value of the brand. The most impactful work seems to have at its core a cause, a purpose, as opposed to what we in the tech industry call speeds and feeds — “This will make your hair shiny.”
The core of the Creative Canvas does need to start with what the brand stands for, and what the brand delivers. Pantene is a great example. The idea behind Pantene is “strong is beautiful,” which you could take in a lot of ways. We have ads that show how the product works, and we have how-to videos that show how you can get different hairstyles using different types of products.
Then we have what we did in the Super Bowl, which was “dad do,” where these football players were doing their daughters’ hair. I have three daughters so I’ve done a lot of a little ponies, and a lot of dad dos. My ponies were not very great. But we found an insight that daughters that spend time with their dads are more confident, and they feel stronger. It has an emotional connection as well.
Or “Like a Girl” on Always — Always is a feminine protection brand that is about confidence. Half of girls, their confidence significantly drops during puberty, with lots of reasons for that, but one of the reasons is demeaning comments like, “You do that like a girl.” We decided we’re going to change that. We’re going to make “Like a girl” mean amazing things.
I saw the research, in fact you did change the perception. Here’s a consumer packaged goods company which is in the business of making quarterly profits and selling commodity products, but has changed the perception of what it means to be a girl in society. Did you set out to do that?
Yeah, I think we did. All these products are everyday household and personal care products. They’re actually very personal, very intimate, they’re part of your everyday life. When our brands can connect to something personal and connect to something emotional or connect to something that’s relevant in popular culture, we can make a difference.
Nineteen percent of women and girls felt that “Like a girl” was a positive thing before we did this. After we did it, 76 percent thought it was positive.
Before we did this, 19 percent of women and girls felt that, “Like a girl” was positive, so in other words 81 percent thought it was negative. After we did Like a Girl, 200 million views later, 76 percent felt that “Like a girl” meant positive things, a remarkable change.
And it worked for the business.
That’s the other thing, it worked for the business. I’ve said this before, but I actually like the word advertising. The Latin root, advert, means to turn toward. That’s what we do, we get people to turn toward our brands in whatever messaging we come up with.
I actually like the word advertising. The Latin root, advert, means to turn toward. That’s what we do, we get people to turn toward our brands.
You could call what we do on these three-minute videos entertaining content, but at the end of the day they’re advertising. We’re best off going to places where people are consuming content for the sake of consuming content, and having our ad show up.
The thing about Facebook is that it is a content platform, but it’s people sharing things with each other and we show up. Snapchat is the same thing. Before it was shows on television and we showed up.
Let’s talk about Dollar Shave Club, which came out of nowhere and became a player in an important business for P&G. It was acquired by Unilever, which is probably your only peer in your category. They don’t have a shaving business, you do (Gillette). How did you respond when you heard that news?
As you would expect, that’s an interesting move. I think the most important response is us thinking about the consumer and what the consumer wants. When you see a startup being acquired by a big company, you start thinking about it as a bit of a inflection point.
What’s really important for us is to think about is what our consumers are looking for. Consumers want their products available in a range of different places, direct-to-consumer, which is what (Dollar Shave) is, e-commerce and traditional retail, and our job is to make sure it’s available everywhere.
That’s the unique aspect of everyday household and personal care products, the fact that you’re talking about billions of people. There’s actually a lot of switching, and there’s a lot of ways in which they want to buy their products.
Dollar Shave didn’t have manufacturing, they didn’t have R&D, they didn’t have any of those traditional costs. They didn’t spend money on advertising, they made a viral YouTube video, they had a direct-to-consumer model. Almost everything about it was something that a traditional company didn’t do. How does a company like P&G become the disruptor instead of the disruptee?
This is going to sound very, very trite, but it’s really important: understand what the consumer wants, because at the end of the day what’s happening here is taking friction out of the system. It’s a more frictionless experience because it’s direct. What we’re doing now with every one of our businesses is think about what does the consumer want, what do they not like about the experience, what opportunities might it provide?
What we’re doing now with every one of our businesses is think about what does the consumer want, what do they not like about the experience, what opportunities might it provide?
We just announced the Tide Wash Club. Tide Wash Club is an example of making it easier for the consumer to be able to get their laundry detergent. We’ve already got prestige businesses that are direct-to-consumer. Disruption occurs when you think about how the consumer experience either is changing or needs to change.
If you go back into our history, as I started with, there’s newspapers, TVs, mass retailing, wholesalers, all those things, e-commerce now, were a result of a technology shift, and then a consumer shift.
Do you feel like there’s also a cultural shift internal to the company that’s required, and would you say that that shift is underway under David Taylor, the new CEO?
Yes, definitely. There’s no question about that. The reason why I’m here in Silicon Valley, our leadership team just spent the weekend here.
I think what David has brought is a real focus on a few things that are important. One is, he calls it straight talk, which is just, “Give it to me straight. Give it to us straight. Give it to each other straight.” Let’s make sure that we get reality on the table, and let’s figure out we’re going to do about that, which is really, really critical right now. It’s always critical, but I would say even more critical right now because of the pace of which things are changing, and that’s bringing even a higher degree of openness.
The other thing is raising the bar, which was the theme of Signal for last year, raising the bar to be the best. We want to be the undisputed best in everything that we do. We’re happy that we have a lot of brands that are number one, but we want to grow more users on our brands, we want to make sure we can drive more sales and value creation.
When we go meet with our partners, the question we ask is: are we the best? Of course they usually start off with, “Well, you’re getting better.” No, we want to know, are we the best and what would it take for us to be the best? I think we’re on our way. We’re never where we want to be, but there’s a pretty high dissatisfaction with the status quo, and we’re pushing it.
That sounds very Silicon Valley.
Yes, it is, we’re inspired when we come here.
One of the questions that we like to ask everybody is what would you tell your “just out of college self,” if you could go back and tell yourself one or two key tidbits of advice?
The single most important thing that I would tell myself is actually to never focus on yourself, and to recognize that what you really need to do to have a wonderful career and a wonderful life is to figure out what your purpose is, and focus it outside of yourself.
I have a very simple purpose, which is to be useful. That’s it, I just want to be useful. Whenever I focus there, things are good. Before I come in, I think about what can I do and extract whatever power I can from the universe to be useful, whatever the case may be. Everything takes care of itself after that.
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