P&G brings ads control in-house

The World’s biggest advertiser, Proctor & Gamble, is to bring the control of its marketing and advertising in-house, saving  £.144bn ($2bn) in spending with ad agencies.

The consumer goods group has already cut its agency spend by $750m in the past three years and surprised industry’s largest companies such as Publicis and WPP, as they plan to cut spending by a further  £1bn ($1.25bn) by 2021.

According to  Marc Pritchard, P&G’s chief brand officer, “ We used to work with  6, 000 agencies around the world and have cut it down to 2, 500. We think we can cut a further 50 per cent”

P&G, the owner of brands such as Ariel the laundry detergent and Crest toothpaste, spends an estimated $10.7bn a year on advertising.

After hearing this news the shares in the biggest advertising companies have fallen in the past year, WPP the owner of Ogilvy & Mather, Group M & J Walter Thompson, lost a third of its value.

With the digital age, the brands are seeking better exposure from digital advertising working directly with technology platforms like Google and Facebook. The average view time of a video ad on a mobile device is only 1.7 seconds which is not more than a glance.

Mr Pritchard added, “ We are annoying people with too much frequency serving ads to people who don’t want to be reached and doing so too many times”.