Procter & Gamble Daily Brand: Goldbach's Conjecture in Advertising

The bustling Guangzhou East Railway Station comes out. Zhongtai International Plaza is one of the first buildings to enter the field of vision. Most people rarely imagine that it is on the 27th to 33rd floors of this building that P&G employees have penetrated their products into the daily lives of the Chinese people.

Recently, this international marketing giant, which is known for its marketing expertise, has repeatedly won the title of "Brand of Excellence" for 2006, China's national television CCTV. Next year, CCTV's screen will once again flash the beautiful advertisements of Pantene, Rejoice and Crest.

However, if you look closely, you will find that compared to last year's RMB 385 million winning bid, Procter & Gamble won 394 million yuan this year, did not show a company's advertising marketing costs with the growth of sales growth in the conventional trend.

Shrink TV ads?

Since Procter & Gamble established its first joint venture in China (Guangzhou Procter & Gamble Co., Ltd.) in Guangzhou in 1988, as one of the world's largest consumer goods companies, this US company founded in 1837 has rapidly expanded its presence in China. market.

Just by observing the supplies in every household bathroom in China, you can know how far P & G has penetrated the daily life of China's urban population. It is already difficult to imagine who does not have at least one Procter & Gamble product.

In the fiscal year 2003-2004, Procter & Gamble’s annual sales were US$51.4 billion. In recent years, the sales growth of Procter & Gamble Greater China has been considerable, reaching over 30%. Although P & G declined to disclose its new fiscal year sales target on the grounds of trade secrets, according to a Procter & Gamble dealer, the sales growth of the Procter & Gamble China market for the new fiscal year is 35%.

According to Zhang Qunxiang, senior manager of Procter & Gamble’s Foreign Affairs Department, the importance of the Greater China market to P & G is global. At present, from the perspective of P & G's penetration in North America and other markets, if P & G is to maintain an annual growth rate of 6%, the most important thing is the rapid growth in Greater China. In fact, in terms of the number of products sold, Greater China has climbed from fifth place to second place in the global P&G market, followed by North America.

In terms of importance, it is not surprising that Procter & Gamble took CCTV’s “standard king” for the second time “rationally”, but with such a huge increase in sales, P&G’s ad placement on the CCTV platform seems to be consistent with this. Not commensurate.

Both in China and the United States, P & G is an absolute advertising major TV station. In the United States, Procter & Gamble was the company with the largest amount of advertisements last year, and the amount of investment in television advertising reached $2.5 billion.

Reminiscent of a media advertising strategy adjustment plan previously announced by Procter & Gamble’s headquarters, there seems to be enough reason to believe that P&G is shrinking in terms of TV commercials.

In the above plan, Procter & Gamble Global stated that it will reduce hard advertising in the major TV networks in the United States. The drop in cable TV network is 25%, and the drop in wireless TV network is 5%. The reduced marketing cost will be put into the network. Such as new media and episodes of embedded advertising and other forms.

Zhang Qunxiang admits that in terms of general trends, P & G China will naturally synchronize with the world. At the same time, however, he particularly emphasized the importance of CCTV in the Chinese market, and stated that for a long period of time, it would still pay attention to placing advertisements on CCTV and other provincial TV stations.

Technical operation mistakes?

In fact, if analyzed from various external data alone, Procter & Gamble really did not put a conventional amount on the CCTV platform this year.

Yuan Fang, director of media research at CTR, revealed that: “Choose CCTV to advertise on this platform. Each major brand needs to spend 80 million to 100 million yuan. Only this amount is enough to open up the entire tender period for CCTV, otherwise its advertising volume is insufficient."

The Procter & Gamble currently has six major brands that need to be put in CCTV. As such, it is estimated that the amount of this year's investment should be around 500 million yuan. According to informed sources, in fact, P&G did have a budget of RMB 500 million for CCTV advertisements this year, but it ultimately only invested RMB 394 million due to its “technical operation mistakes”.

According to observation by professionals present at the time, P&G's failure to obtain the ideal bid award was mainly due to the fact that its first round of bids was too low and it had lost certain qualifications for certain hours, not because it voluntarily gave up.

In this case, Yuan Fang also revealed: "P&G does have a low price estimate for this year, so many bids are not short-listed. Many of the bids they now receive are after the "Focus Interview" and the title of the theater, so the final winning bid The amount is more than 300 million yuan. In fact, this year's plan for the release of P & G should be 500 million yuan."

However, Yuan Fang also stated that because each company's estimates of media advertising prices are different each year, it is normal for such misjudgments to occur.

Goldbach conjecture in advertising

After all, whether P & G intends to curtail TV commercials, or whether its technical operation has caused a drop in the quota, this is only one aspect of the problem.

Another aspect of the problem is that with the emergence of new media, the advertising market has entered a period of change. Regardless of whether it is optimistic or not, online media has become the object of more and more people talking about.

The latest data from the CTR market research shows that TV is still the absolute leader in the Chinese advertising market. According to the Nielsen Media Research's advertising monitoring data, in the first half of 2005, the advertising spending in Mainland China was 143.4 billion yuan, of which television advertising accounted for nearly four-fifths.

However, in the near future, will the position of this boss be shaken by the new media?

According to iResearch, the global online advertising market reached US$580 million in the first half of 2005, an increase of 25.8% from the same period last year. There are also reports that the real growth of portals such as Sina and Sohu this year has been in Internet advertising, with each quarter growing more than 10% from the previous quarter.

Among the people who are optimistic about online media, they believe that online media will have an explosive growth in the next two years. Yu Lei, a marketing expert in China's FMCG industry, even believes that “in the future, online media will account for at least 50% of the entire advertising market. ".

And it seems that some more people have a mild attitude toward China’s online advertising. They think that although the big situation is good, its growth will not be rapid, and it is even less likely to pose a threat to television media.

Wang Enhai, head of the Information Service Department of China Internet Network Information Center, belongs to the moderate school. He said: "Now, the area with the highest Internet coverage is Europe, and Sweden has more than 70% coverage. In the United States, the network coverage is about 68%, but China still has only 9% coverage, and, Of the 9% of the population, only about one-third of consumers are truly valuable to advertisers,” Wang Enhai said. “This restricts the development of online advertising.”

Yuan Fang’s opinion is similar to Wang Enhai: “Analysis from the aspects of online population and network coverage, the network is not very suitable for many enterprises, especially for daily chemical, pharmaceutical and food industries with the largest amount of advertising. It's difficult to advertise on the web."

In fact, so far, because of the constraints of research methods and other reasons, there is no authoritative third-party statistical data to make an objective description of the development of online media advertising.

But as advertisers, when a new media emerges, they are always willing to try. Li Guangdou, one of China's top ten planners, said that advertisers are constantly exploring new forms of advertising. When we examine the effectiveness of advertising, we will ask that half of the advertising costs spent on investment are wasted, but which half is wasted? No one knows.

"This is Goldbach's conjecture in advertising." Li Guangdou said.