It has been 4 months since our last post. For that, I apologize, and offer up astounding amounts of business activity as a weak excuse for not sharing thoughts. Today, on the eve of the Digital Signage Expo, I read with a great deal of interest a story on the website of the In-Store Marketing Institute. The story reports on a presentation by the CEO of Procter & Gamble, A.G. Lafley, to the Consumer Analyst Group of New York last week. The full text of the article is here.
Lafley shared interesting data and insight in his presentation. He reveals that P&G, certainly a marketing giant, spends $10 billion dollars annually on consumer marketing, and an additional $10 billion on in-store promotions at retail. The consumer marketing spend is largely mass media advertising, as anyone who watches television can attest. The in-store promotions take many forms, from sampling to couponing to in-store merchandising support and more. Lafley shares that P&G’s $20 billion expenditure is made without really understanding how shoppers actually make purchase decisions. He goes on to describe how he believes that the P.R.I.S.M. project will provide P&G with a better picture of “what’s really happening in the store”. He makes it clear that P&G intends to use the knowledge gained in the study to assess how and where it allocates its $20 billion marketing and advertising budget.
An AdAge article based upon the same analyst meeting that Lafley spoke at reported that Kimberly-Clark plans to reduce television advertising from 60% of its media mix to 46%. Nontraditional media spend, which explicitly includes digital media, will expand from 10% of the mix to 34%. In the same article, it is reported that Unilever is also rethinking how it spends on television. In one analyst meeting on Friday, three of the largest CPG companies spoke in different ways on how they are rethinking their advertising and marketing expenditures.
All of us in the digital signage space have crowed for years that the ability to get a marketing message to consumers via mass media has become very difficult and expensive in recent years. We share the view that targeted messages at the point of decision have a better chance of impacting behavior than a message sent through the clutter of mass media. The fact that P&G is publicly putting stock in the findings from P.R.I.S.M. and that Kimberly-Clark is already reallocating TV dollars gives clear notice that we can expect a tangible shift in spending from the world’s biggest and most influential advertisers.
From an industry perspective, digital signage networks at retail can offer an alternative to traditional media outlets for advertising, and an adjunct to in-store promotions. While trade dollars have traditionally been considered off limits for dollar shifting to digital signage, it seems that P&G may be willing to rethink the overall allocation based on effectiveness. Now there’s a great idea! Effectively, digital signage network owners would be able to drink from both buckets. Lafley’s comments are yet another sign that our industry is maturing and filling a need in the marketplace. And you can bet that other CPG companies are monitoring the actions of Kimberly-Clark, P&G and Unilever with deep interest. The tide may be rising for digital signage as never before.