P&G discovers the benefits of online advertising

Procter & Gamble, a maker of products like Gillette and Oral B, plans to cut the $ 10 billion ($ 17 billion) a year the company uses for advertising. And, it seems, the fault of the new vision of the company, which realized the practical and profitable side of virtual advertising.

Robert McDonald, CEO of P&G, realized that placing his advertisements on vehicles online “is much more efficient”, in addition to the web being a much cheaper vehicle than traditional media. To cut advertising costs, the company laid off 1,600 employees linked to the marketing area. The amount resulting from the cost reduction, which can reach about US $ 240 million (about R $ 408 million), will be used in digital media, where there are more options and means of distribution, according to Jon Moeller, director of finance for the company.

Now, he says, time to “moderate” advertising spending. In a long-term estimate, the company wants to spend between 9% to 11% of total sales on ads.

“There are many different media available today and we are getting closer and closer to digital businesses”, he says, in an interview with Ad Age. He also says that, in the digital space, with Facebook, Google and others, the company found “the return for these advertising investments”.

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