Lafley (A.G) CEO of Procter and Gamble. Lafley said in Thursday that the company's current digital advertising spending accounted for 25% to 35% of the total marketing budget, and that the share of the U.S. market was close to the upper limit, compared with the average company's digital ads, which accounted for only 20% to 25% of the marketing budget. As America's biggest advertiser, the move underscores the threat to traditional media such as print media.
The company plans to increase advertising costs and pay more attention to digital media this fiscal year. This reflects a shift in consumer attention, on the one hand, and a reflection of the effect of the gamble on increasing marketing costs. In many cases, the digital media will allow the Procter and Gamble brand to reach consumers at a faster rate and at a lower cost, while also getting faster feedback, according to the company's executives.
Lafley in May as the CEO of Procter and Gamble, the first public speech since his return in Thursday. The earnings for the fourth quarter ended June 30, with a 1.9 billion dollar decline of 48% per cent, but revenues still rose to $20.7 billion trillion, according to the financial results released by Procter and Gamble in Thursday.
Lafley said the company will focus on product innovation, cost cutting, core brand operations and the most important markets. He said the company plans to revive Pantene and the brand, which has lost market share to rivals in recent years.
The business of Procter and Gamble rests on deep consumer research and high priced products marketed by blockbuster advertising. Previously, television was the main advertising media, but the situation was changing. The recession has made consumers more frugal, and there are now many ways to influence consumers through networks and mobile technology.
The average consumer spends more time on digital media this year than watching TV for the first time, according to emarketer, a market research firm. It is estimated that adults spend an average of five hours a day on the internet, mobile devices or other digital media, compared to 4 hours and 31 minutes per day for television viewing.
According to data from IRI, Kantar Media and emarketer, the advertising spending of US consumer goods companies last year was $13.4 billion, of which 22.2% were spent on digital media, compared with 19.3% in 2011.
The total revenue for the last fiscal year was $84 billion trillion, and marketing costs for the fiscal year have not yet been announced. In 2012, the marketing cost of Procter and Gamble was 9.3 billion dollars, and one-third of the revenue came from the North American market, where marketing was most expensive.
Lafley says the company's spending on digital media varies by brand. For certain businesses, he said, "digital media works very well and we will invest more." "Procter and Gamble to help Bao suitable diapers, secret deodorant and Old Spice men care products belong to this category."
As digital advertising has eroded the market share of television advertising, it has increased its investment in the former, even though there is little evidence that television is in trouble.
EMarketer said the cost of digital advertising in the United States is expected to increase by 14% this year, to 49 billion U.S. dollars, television advertising costs are expected to increase only 3% to 66.4 billion dollars. Most of the American attention shifted to mobile devices. The average adult spends more than 2 hours and 21 minutes chatting on smartphones and tablets every day, more than the time spent on desktops and laptops, and more than an hour last year for mobile devices.