After a decades-long absence, Procter & Gamble is back in business with radio. During a Radio Show panel Thursday afternoon, one of P&G’s top media and marketing execs said the company will increase its new plan to spend on radio—but the medium will need to deliver results to remain part of its media plan.
“We are spending more and you’re going to see more in the next couple of quarters,” John Fix, analyst/manager—North America Media & Marketing at P&G, told a packed room of broadcasters during his first appearance at a radio event.
The consumer-packaged goods giant has been advertising on broadcast radio over the past several months for some of its biggest brands. But, said Fix, “If at the end of fiscal, I haven’t coordinated a way to make the brands feel good about their investment, next year won’t be as active.”
Like most homecomings, P&G’s radio return has a back story, one chronicled in an Inside Radio story package that has reverberated across the industry.
As the world’s largest advertiser, P&G invests billions of dollars in media time. But it and other CPG giants have grown frustrated by narrow digital-ad targeting. P&G wants to speak to everyone, not a narrow target, Fix explained, which is why it has rediscovered radio.
There is a lack of growth and lot of pressure in the category, noted Lana Busignani, executive VP of Nielsen Marketing Effectiveness, during the Radio Show panel Fix appeared on. That’s one reason why P&G rethought its marketing, which included cutting $100 million in digital advertising it deemed ineffective. When you’re selling products almost everyone uses every day, like, say, toilet paper, a niche approach isn’t the answer.
P&G wants to reach as much of America as it can, once a week, Fix explained. While TV has been its media cornerstone, it’s a costly investment to use television to reach 72% of the U.S. “The brands are looking to get the reach they want and they can’t get it with TV,” Fix said. “Knowing that, radio seemed to be an option.”
P&G is now augmenting its media portfolio with radio buys for some of it biggest brands to reach Americans it can’t get through TV. Among P&G brands now using radio are Tide, Pantene, Vicks and Gillette.
“You saw 93% of households are listening to radio. That’s the scale I need for my brands to reach the people that buy them,” Fix said during the panel, moderated by Nielsen Audio managing director Brad Kelly. “My marketing portfolio adds up such that I can talk to as much of the U.S. as buys my products.”
Fix credited a piece penned by Kelly, “The Six R’s of Radio,” as making a compelling argument for giving the medium a shot. “Recency, relevancy talking to the right people before they get to the retailer….There’s such a compelling argument for it,” Fix said.
But radio will need to deliver results for P&G to stay on the media plan. CPG manufacturers are notoriously analytical and extremely data-driven. P&G, for instance, has 31 different media data feeds to inform each if its brands about how they’re doing across each media channel.
The company will use its own market mix models to gauge the effectiveness of its radio buys. The sophisticated models involve plugging numerous inputs into an algorithm—specific ad campaigns, use of coupons and retail endcaps, even the weather—to find correlations between marketing activities and unit sales. While these models historically haven’t been able to “read” radio, Fix said they’ve improved and become granular enough to track the impact of local radio campaigns. The models are its “gold standard” but the company’s vast media research arsenal can also include equity studies and surveys “and a lot of different things that the brands would look at to validate the [marketing] they paid for.”
In addition to explaining why P&G has added radio to its media mix, Fix also offered the industry some advice on how to pitch him. “The reason I want to talk to you is because you can speak to more consumers than anybody. This is what I want,” he said. Yet he recounted hour-long meetings with radio companies where for 50 minutes, “I will hear about everything you’ve never done but want to. I hear about podcasts you’ve never broadcast. I hear about targeting, and what I really want to talk about is how you can touch 93% of the United States. And you leave me 10 minutes to talk about that. So, we can’t talk about how, we can’t talk about setting up relationships with the agencies.”
Instead Fix urged radio sellers to focus on the “bread and butter,” namely broadcast radio. “It’s a gimme. You’re selling water in the desert, you have what I want. How can you fail at selling me what I want?”
Cincinnati-based Fix went on to talk about his own radio listening habits—he’s a big NPR fan—and how he depends on the medium. He also noted that many Millennial-aged, New York City-based agency people believe “myths” that radio is dying and has no reach. “That’s frustrating,” he said.
Before the panel discussion, Nielsen’s Kelly Abcarian, senior VP, Product Leadership, talked about new sales tools and richer local insights the company is offering, such as the Nielsen Marketing Cloud, that enable radio clients to better identify and target consumer segments. “The power of radio is why you are seeing new competitors in the audio space,” Abcarian said. “Don’t let anyone tell you that local broadcast media isn’t as addressable as digital. Use the power of data to illuminate your audience.”