P&G set tougher rules for digital media agencies and players, insists on more transparency
Procter & Gamble Co., the world’s biggest advertiser, is laying down the law for digital media players and agencies in a five-point program that will take effect this year as outlined by Chief Brand Officer Marc Pritchard on Sunday evening at the Interactive Advertising Bureau’s Annual Leadership Meeting in Hollywood, Fla.
“The days of giving digital a pass are over,” Mr. Pritchard said, urging the rest of the ad industry to follow P&G”s lead. “It’s time to grow up. It’s time for action.”
The heavily influential marketer’s program includes a thorough review of all media-agency contracts after the company found a surprise in its dealings with at least one agency, plus requirements that everyone use industry-standard viewability metrics, fraud protection and third-party verification.
And to enforce all of those steps, Mr. Pritchard said the company has vowed to no longer pay for any digital media, ad tech companies, agencies or other suppliers for services that don’t comply with its new rules.
“We’ve given them plenty of notice,” he said, according to transcript of his prepared remarks that was provided by P&G. “More than a full year for many.”
P&G doesn’t “want to waste time and money on a crappy media supply chain,” he said. And he urged others in the industry to follow suit.
“Don’t accept the excuses,” he said. “Don’t wait for someone else to move. …There is tremendous power in the collective force of our industry.”
“So we are now poring over every agency contract for full transparency by the end of 2017 to include terms requiring funds to be used for media payment only, all rebates to be disclosed and returned, and all transactions subject to audit,” he said, according to the transcript of his prepared remarks. “We’ve had some surprises. It’s taking time to complete, and we’re often using outside counsel,” Mr. Pritchard said.
At the same time, P&G is re-examining its media-agency fee structure “to make sure we’re paying appropriately for services rendered,” he said. “When we asked why the agency used the money for float, they said, ‘Your fee doesn’t cover our expenses.’ Another humbling moment. ‘Oh, I didn’t realize that.’ Having unprofitable agencies is not good business, and can lead to practices we don’t want, so we’re taking a closer look at matching fees to services.”
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