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Procter & Gamble (P&G) experienced their best quarter and fiscal-year sales growth in a decade, and in their Q4 2019 Earnings Call, they credited “propensity marketing” as a primary reason for their success.
“We Start With Understanding Our Consumers”
With a database of more than 1 billion global consumers, P&G has shifted from generic demographic targets to “smart audiences,” explained David Taylor, P&G Chairman of the Board, President and CEO.
Their new narrowly targeted audiences are focused on the intersections of behaviors, mindsets and P&G products. First-time moms and first-time washing machine owners were two of the smart audiences mentioned Taylor during the P&G earnings call.
“We start with understanding our consumers and their needs, wants and aspirations,” said Taylor. “We then create advertising that makes you think, talk, laugh, cry, smile and, of course, buy. Advertising that drives growth for categories and brands. Advertising that clears the highest bar for creative brilliance, sparking conversations, affecting attitudes, changing behavior and, sometimes even, defining popular culture.”
“A Strong Focus On Noticeable Superiority”
P&G has been focused on strengthening their product portfolio, especially in the daily use categories for which performance is tied to brand choice. “Grown from the strategy David Taylor initiated that has a strong focus on noticeable superiority,” explained P&G spokesman Damon Jones, P&G’s investments have given them an advantage within many competitive categories.
The recent P&G innovations have been focused on winning the consumer and customer value equation. They’re enhancing products to meet important needs and elevating their packaging to enhance user experience. Innovation strategies have been designed to increase consumption and create additional usage occasions. As a result, P&G is increasing category size, which they believe is more sustainable than just stealing share from their competitors.
“Reach People At The Right Time, At The Right Place”
But the P&G team knows they need more than notable product enhancements to win. Superiority is “insufficient to keep us ahead in a world with a rapidly changing environment, quickly evolving needs, media transformation and revolutionary changes in technology,” explained Taylor.
P&G is deploying data and artificial intelligence (AI) to construct consumer propositions, enhance shopping experiences and deliver messages that resonate with their tightly defined consumer segments. Like all marketers, they’re working to “reach the right people at the right time at the right place,” according to Taylor. But unlike many CPG brands, P&G is leveraging a robust data set that is helping them succeed.
“We’re Reinventing Brand Building”
“In the past, we’ve had broad demographic groups that we targeted,” Taylor confided, “and it’s always been said that half your media is wasted, and you still don’t know what happened.” But with their database of a billion worldwide consumers, P&G doesn’t have to play the mass marketing game like they once did.
“Once you have the smart audiences, you can do propensity marketing with people that have similar characteristics,” said Taylor. As a result, Taylor noted, P&G is “reinventing brand building from wasteful mass marketing to mass one-to-one brand building fueled by data and technology.”
“We’re Finding Efficiencies In Our Overall Media Program”
Taylor believes their audience segmentation, targeting and overall marketing performance will continue to get more powerful with more collected data, refined audience segments and optimized performance marketing campaigns. Data, he explained, can fuel lean innovation. For P&G it has allowed them to “get very targeted audiences to test new business ideas, new products and new propositions.”
“Stronger Media Delivery, Stronger Programs At Lower Cost”
An investment in collecting first-party, opt-in data has allowed P&G to revolutionize their marketing programs and achieve “stronger media delivery, stronger programs at lower cost,” according to Taylor. And other CPG brands can follow their example.
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