TEXT OF INTERVIEW
Kai Ryssdal: One of the tricky things about falling prices, and I’m intentionally not saying deflation here, is that over time they tend to make consumers stop spending, waiting for a better deal to come along. That complicates life for marketers who have to work all the harder to push their products. Procter & Gamble makes Pampers and Tide. Google is, well, you know, Google. Normally, you wouldn’t use those two companies in the same sentence. But they’ve been working together for a while, going so far as to swap employees.
Ellen Byron’s been following the story in The Wall Street Journal. Ellen, good to talk to you.
Ellen Byron: Hi. Thanks for having me.
Ryssdal: Procter & Gamble, Ellen, is famously buttoned up. Google is famously not. How did these two get together to do this?
Byron: Well, they definitely are strange bedfellows. I mean, Procter & Gamble has a rigid corporate culture, and employees jokingly call themselves “Proctoids.” And Google, you know, they travel the hallways on company-provided scooters. But Procter & Gamble realized that it needs to catch up with where its next generation of consumers are. A lot of young consumers obviously spend a lot of time online. And Google, for its part, needs to convince big marketing spenders to spend more of their ad dollars online. Right now about 40 percent of the world’s advertising spending goes to TV.
RYSSDAL: Does P&G spend a lot online?
BYRON: P&G doesn’t disclose where it spends its advertising dollars, but it’s estimated that its U.S. marketing only includes about 2 percent online.
RYSSDAL: And that spending is how much?
BYRON: P&G spends about $87 billion a year on advertising. And in the U.S. it’s estimated that it spends almost half that.
RYSSDAL: So, 2 percent of that is a pretty nice piece of change for Google to be able to pick up some part of.
BYRON: Sure, well, Google really wants to convince P&G to spend a lot more online. So, you know, really growing that 2 percent of ad spending to a much bigger chunk of change.
RYSSDAL: There’s a certain cynical aspect of this that popped into my mind when I read the story that you wrote this morning, that, you know, Google is going to give them parameters on who’s clicking through and what they’re looking for and it’s really a ploy to get more information about us, the consumer.
BYRON: Yep. That’s right. But to be totally candid here, Google has a lot to gain out of this relationship, too. I mean, by spending time side-by-side with brand managers at P&G, they’re able to really understand at a fundamental level what these brand managers are looking for in ad campaigns. And then they can — Google — can just alter its approach to make sure it’s right on. So, there was a lot of fine-tuning of sales pitches that was happening at the same time.
RYSSDAL: Being that they’re so different, there must have been problems along the way.
BYRON: That’s right. They did have some hiccups along the way. One example that came up was when the Google employees suddenly realized after looking at decades-worth of Tide detergent advertising, that the orange packaging that Tide comes in is a really important part of its brand.
RYSSDAL: Well, yeah.
BYRON: That’s something that, you know, long-time P&G employees would automatically realize. But people from a 10-year-old company don’t necessarily have that relationship with a big brand.
RYSSDAL: Is this translating into anything in practice? Are there signs that Procter & Gamble is actually picking up on online marketing?
BYRON: Yes. The Pampers website just last week got redesigned into a online parenting discussion forum. And that was something that definitely was inspired by this swap, as well.
RYSSDAL: Ellen Byron at The Wall Street Journal. Thanks a lot, Ellen.
BYRON: Thanks. My pleasure.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.