Something Very Real at the IAB.

Something pretty terrific happened yesterday at the IAB’s Annual Leadership Meeting.  Leadership.

There are two moments in particular that I feel are worth calling out; one that I expected and one that I did not.  I fully anticipated IAB CEO Randall Rothenberg’s masterful illumination of the direct brand economy in which unencumbered upstarts like Dollar Shave Club, Glossier and Warby Parker soar at the expense of Gillette, L’Oréal and Lens Crafters.  Along the way he got very specific about the continued growth of these players, how they’ll reshape the businesses of the major corporations that compete with or perhaps acquire them, and how data becomes the new capital of the 21st Century.  R2 closed by committing the IAB toward adapting to and embracing the Direct-to-Consumer ethos.  That was big.

What was less expected was what happened next.  A 150-year-old multi-national marketer took the stage and gave what I considered one of the most important speeches in the history of the advertising business.  First, some background.

Last year at the same conference, Procter & Gamble’s Marc Pritchard famously called out the tainted supply chain that the digital ad business had built over the past decade, a set of institutions and practices that had promulgated fraud, waste, lack of accountability, shady content adjacencies and more. And then he pulled all his company’s money until very specific steps were taken.  Pritchard lit a fuse that sent shock waves of immediate change throughout the business.

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This year Unilever’s Keith Weed did him one better.  In a well-crafted, visually-arresting presentation, Weed raised the stakes and the temperature.  While our “sleepwalking through the swamp of the digital supply chain” may have once (like in 2017) been seen as an advertising problem, it is now a full-blown social issue.  “Now it’s about how it’s impacting society.”  As the events of the last year have shown, the digital advertising machine has become a dependable financial bulwark for internet trolls, hate speech, misogyny and political destruction.  And Weed’s unambiguous message was that since marketers’ money had fed the beast, only the future use of that money could kill it.

He went on to say that that marketers will be defined and rewarded based on whether they end up on the right side of history on several closely-linked issues.  Yes, the kind of content a brand sponsors and enables is a critical responsibility.  But so is the battling of gender stereotypes in advertising and packaging; so is the protection of children; so is indirect stewardship of the environment; so is the economic treatment of growers and farmers and others in the physical supply chain.  The marketing dollar can either support good or evil in the world, and Weed has committed that Unilever’s dollars will stand for good.

Over a decade ago, Unilever acquired Ben & Jerry’s, one of the original direct-to-consumer, socially-conscious brands.  Up near my home in Vermont there was a righteous fear that Unilever would change Ben & Jerry’s.  Maybe just the opposite has happened.

P&G’s Last Stand.

Last January at the IAB Annual Leadership Meeting, I followed Procter & Gamble CMO Marc Pritchard on stage after his speech about all that was wrong with the digital supply chain – the first of his ultimatums to the digital advertising channel.  It was a very impressive speech, and he said a lot that needed to be said.  Ten years ago we used to joke that P&G shouldn’t get to make any public pronouncements about digital advertising until it actually spent money on it; and here was the P&G CMO – who’d spent a lot in recent years – having his say.

But then came the Ides of March.  In an instant P&G cut $100 million in digital ad spend, with the implied threat that until we got our collective act together on fraud, viewability, standardization and more, that money wasn’t coming back.  I know many sales reps who did land office P&G business in 2016 and who are now seeing a big fat zero in that column.

But I wonder….

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I wonder if this is all as clear as it’s meant to look.  All that money went away:  will it really all come back once MRC accreditation kicks in?  I’m starting to think that it won’t.  And even if it does, I’m not sure it’s going to flow through the same pipes or look anything like the spending we all got used to in recent years.

I wonder if P&G cutting $100 million from digital wasn’t just the least painful, most justifiable way they could make a significant move away from above-the-line brand advertising.  The world has changed dramatically for P&G and other packaged goods giants in recent years, and the change doesn’t have all that much to do with viewability standards on digital banners.  The simple truth is that the distribution chain has been completely upended.  Amazon has become a dominant channel for the sale of packaged goods, household and personal care products, and they will continue to press the P&Gs of the world for deeper and deeper discounts.  That money has to come from someplace.

I wonder if those working so hard to win P&G’s digital advertising money back might be fighting the last war….as if we all just assumed that the biggest TV advertisers would morph into the biggest digital spenders.  I wonder if advertising isn’t being seen now as a cost center to be managed and if the goal might be to buy less and less of it.

I wonder if we all need to think less about how we’ll help P&G spend its shrinking pile of advertising cash and how – instead – we might help them sell more product in a world where there’s a new normal for distribution and consumer behavior.

I wonder if we’re not all missing the story line here.