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At Davos, P&G's Marc Pritchard says consumers expect brands to be a force for good
Advertising

At Davos, P&G's Marc Pritchard says consumers expect brands to be a force for good

Marc Pritchard Proctor & Gamble

Neil Hall/Reuters

  • Marc Pritchard has led many of the ad industry's causes, from cleaning up digital advertising to promoting equality.
  • Sustainability is the next frontier in the consumer packaged goods giant's fight, he told Business Insider on Monday at the World Economic Forum in Davos, Switzerland.
  • Pritchard also discussed the importance of brands taking a stand on social issues, how direct-to-consumer brands are impacting P&G's business, and how its relationship with ad agencies is changing.

DAVOS, Switzerland - As the marketing chief of the world's largest advertiser, Proctor & Gamble's Marc Pritchard has led many of the ad industry's causes, from cleaning up digital advertising to promoting equality.

Sustainability is becoming the next frontier in the consumer packaged goods giant's fight, said Pritchard, who spoke to Business Insider on Monday at the World Economic Forum in Davos, Switzerland.

"What we're trying to be is a force for good and force for growth, which is a perfect fit for the World Economic Forum," Pritchard told BI executive editor Matt Turner. "Companies are realizing that they can have an impact on improving the environment, and improving their quality and growing at the same time. In fact, the two go hand-in-hand."

Pritchard also addressed the importance of brands having a point of view on social issues, how direct-to-consumer brands are impacting P&G, and how it's changing how it works with its ad agencies.

Here's an edited version of our conversation.

Matt Turner: There is almost an expectation from consumers, younger consumers in particular, that the brands that they buy from represent their worldview and have those kinds of goals. How do you see that evolving?

Marc Pritchard: Consumers are now telling us they expect more from brands and companies - and it's not optional. There was a recent study that indicated that nine out of 10 consumers feel better about a brand if it supports a social or environmental cause. Half of the consumers are making choices based on shared beliefs. From Gen Z to millennials to boomers, there are increasing expectations that brands take a stand on societal issues. So, it's really becoming part of what people that we serve are expecting and therefore we're building it into everything we do.

When it comes to brands and businesses doing good, we need to think about what we do individually, but also collectively. So there are several alliances. For example, in the advertising world, there's the ANA #SeeHer movement, the UN Women Unstereotype Alliance, with a focus on accurate and positive portrayal of women and girls. There's "Free The Bid" to get women behind the camera. There is a #BrandsForGood from sustainable brands to drive sustainable behavior. That is critical, because that not only drives innovation, it also drives industry growth. And that lifts all boats.

Turner: But what are the opportunities, and then the overt risks of doing that? Whether it's the Nike Colin Kaepernick campaign or the Gillette campaign more recently, it gets people talking and they often have opposing views. So how do you navigate that?

Pritchard: The first thing we tend to do is - since we're the world's largest advertiser and since advertising affects perceptions based on the images and portrayals - is just accurately and positively portray women, girls and men, of all races, sexualities, abilities and cultures, because just accurate portrayals will start to normalize diversity. Then, periodically what we'll do is we'll take a point of view and will express a point of view.

"Like a Girl" from Always changed the meaning of that phrase to positive; SK-II "Change Destiny" is literally changing norms in certain countries; Ariel's "Share the Load" is getting men and showing men to do household chores like laundry; and Gillette, which launched last week, was about really promoting positive behaviors and showing a definition of masculinity that is, that is positive and taking positive action.

Read More: Gillette knew that its new #MeToo ad would prompt backlash. Here's why the company still went ahead with it.

Not everyone will agree, but what's most important is that it sparks a conversation, because conversations lead to understanding, understanding leads to empathy, empathy leads to attitude change, and attitude change leads to action.

Turner: How are your ads themselves evolving? Advertising is becoming entertainment or media in its own right.

Pritchard: The younger generation in particular is really looking at ads in a different way. Not as we know them and have known them, they're looking at ads with a point of view: what does this brand stand for, who are the people behind it? What's interesting about "Like a Girl," for example, is that once that ad started running, that brand started growing - and has grown ever since. SK-II has been running in double digits. Ariel and Tide are probably one of our best growing brands. These ads actually turn into purchase intent, which is then sustainable.

We're also trying to make our brands sustainable. We want to make it easy for people to be sustainable just by using the brand. So with Tide and Ariel cold wash, you turn the temperature down 30 degrees Celsius because 80% of the laundry machine's energy use is heating the water. So just by using that in washes and cold water, you're being sustainable.

Turner: How do you reach consumers today? How has that evolved and will continue to evolve?

Pritchard: It's very clear that mass marketing as we know it is being disrupted. And our focus is to lead that disruption by reinventing brand building. Traditional TV continues to decline. Digital is being increasingly blocked. Over-the-top streaming is growing exponentially. E-commerce and direct-to-consumer is growing. What we're doing is reinventing our media, using privacy compliant anonymous consumer IDs to be able to reach people more directly. So we give them ads when they want them, how they want them.

We're creating content to a large extent that can go into over-the-top streaming and express a brand's point-of-view, or even sponsor programs in such a way that those are places where it's not an ad at all. And we're taking technology and embedding it into our products. So to a large extent, that becomes the ad or replaces the ad. "Olay Skin Advisor" is a great example. It's got artificial intelligence embedded into it. You take a selfie, it actually links back to a database that can give your skin's age versus your actual age, and then it can give you [recommendations on] products and usage. So that essentially replaces an ad.

Turner: Can you share more recent examples, or examples of things coming down the pipeline that we should be aware of?

Pritchard: We just did some work with Katie Couric Media, where we created some really short, six-minute news programs that embedded our brands in them: Pantene, Olay and Secret. We're doing some work with Arianna Huffington. We have a partnership with Queen Latifah, where we just hired two black women directors who are creating some content that we're then going to use. Olay has been doing some amazing work where they basically turned some of their ads into a musical on VaynerMedia.

And SK-II did something called "Marriage Market Takeover," and in China, and something called "Expiry Date," which is a four-minute film that challenges the conventions that women have an expiration date as to when they need to get married or when they need to have children, and they can change their own destiny. They create this content, people see it, they search, and then they buy.

Turner: How has the rise of direct-to-consumer companies play to this? What are you learning from them and how are you implementing the techniques that they seem to be having success with?

Pritchard: We want to operate like a startup, but with the knowhow of a 181-year-old company. We have access to 275,000 startups through something we call our "Signal Accelerator Network," which allows us to identify a consumer problem, find a startup and then be able to connect that back [to one of our brands]. That's actually where we found the AI engine for Olay, from Neurologix, a small company.

We have also really flipped and changed our innovation approach. We studied Silicon Valley and things like Eric Reese and worked with a company called Bionic that allowed us to go apply lean innovation techniques - basically startup techniques: Founders, three or four people on a team, what's the consumer pain point, minimum viable prototype, move fast, fail fast, pivot quickly.

We now have 130 seed-stage experiments going. We just were in CES where we showed some of the output of that. Gillette had heated razor product. That's allowed us to go faster while still having our big performance engine working well. Now we're starting to see some of those things go over into the bigger engine. That's what DTC has inspired us to do.

We've also bought some companies. We've acquired Native deodorant, Snowberry skincare from New Zealand, First Aid beauty. So that has helped us not only amplify our business in those areas, but also then learn new things like performance marketing. We think the small can help the big get faster. And we think the big can help the small grow faster.

Turner: How has that impacted the mix of how much you have in-house versus working with outside partners?

Pritchard: It has really caused us to be discerning about what should we be doing in-house and what should we be doing with partners. When it comes to innovation, we have a vast network of partners, in terms of product innovation, packaging, innovation, brand building innovation, supply chain and retail. Much of the technologies that we have also come from partnerships. But it also affects our agency world, where now with data analytics, we are finding that we can bring a lot of the planning and analytics in-house from a media standpoint in particular, and then still work with agencies where it makes sense.

Turner: What do agencies need to do to stay relevant then to clients?

Pritchard: Agencies really need to figure out what their value proposition is. So we've talked with all of our agencies about what we're going to take in-house, and here's what you can do most effectively. There's still a lot of work when it comes to scheduling, buying, placement. There's a lot of innovation that they can do in terms of media.

Then there's creative. They have the vast network of creative resources that they can tap into. Many of our partners, Publicis, for example, has been very good partner in terms of really figuring that out. They [Publicis] have a system called Marcel where they can basically use machine learning and artificial intelligence to find the best creative for the job. That's the kind of innovation we want to see from them.

Turner: What do you think of Amazon as a platform for advertising?

Pritchard: The Amazons, Alibabas, JDs are all advertising platforms as well as commerce platforms. First of all, they have search, which allows you to get very connected. We put videos and other products on there. We also work with many of those partners on data, to do propensity-modeling so we can more precisely reach people when and where it matters. All of them are looking at innovations in terms of content. And obviously Amazon has as a lot of over-the-top work they're already doing in video.