Ad giants at risk of squeeze as P&G to rein in agency spending

Procter & Gamble is stepping up efforts to "take back control" from advertising and media agencies by investing more in internal analytics programmes – a move which will spell further trouble for ad giants WPP and Publicis. 
The chief brand officer of the American consumer goods giant, Marc Pritchard, told the ISBA conference that companies had "relinquished too much control" in their bid to expand into digital advertising, "chasing shiny objects, overwhelmed by big data, and ceding power to algorithms". He said this had resulted in "wasteful mass blasting". 
It follows P&G's announcement last week that it cut its digital advertising spend by $200m last year. 
The group, which is behind brands including Gillette razors and Crest toothpaste, said spending had been slashed as much as 50pc with "several big players", though declined to say who those players were. It is in the process of reducing the number of agencies it works with from 6,000 to 1,250.
Mr Pritchard had said at the time that P&G would be shifting the "industry from the wasteful mass marketing we’ve been mired in for nearly a century to mass one-to-one brand building fueled by data and digital technology". 
Today, he clarified that P&G will be investing more in its own digital management platforms and analytics in order to target its advertising better. 
The comments come less than a week after Sir Martin Sorrell, the chief executive of WPP, claimed that there was still a role for advertising agencies.
Ad giants at risk of squeeze as P&G to rein in agency spending

Sir Martin Sorrell, the chief executive of advertising giant WPP

 Mark Runnacles
Sir Martin said tech giants, such as Facebook and Google, were not threatening to cut out agency middlemen.
"Tomorrow they may decide to go direct but that is not what they are saying. They do not say these things lightly," Sir Martin said.
Facebook and Google currently account for more than half of the UK's digital ad market, research by eMarketer has shown. 
Sir Martin was speaking after WPP issued disappointing results, which showed revenues fell 0.9pc during 2017 and in which it downgraded long-term targets.
Sir Martin said "2017 for us was not a pretty year".
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