Procter & Gamble’s 10-year deal with the International Olympic Committee is the company’s largest sports sponsorship venture yet. It spans 38 categories, 50 brands and four billion consumers. Marc Pritchard, P&G’s global marketing and brand building officer, says plans for a far-reaching programme around the Olympics Games will help accelerate the company’s growth in developing markets, and extend its reach in territories where its brands are already strong.
The new global deal allows P&G to use the Olympic rings in marketing campaigns for brands such as Pampers and Gillette. It also presents the company with the opportunity to forge partnerships with athletes from all competing nations. The sponsorship is part of a broader strategy, which saw P&G increase its advertising spending by more than US$1 billion to US$8.6 billion last year, to reach its target of attracting a billion new customers over the next five years. Most of the growth is expected to come from developing markets.
Atifa Silk There have been question marks over the financial benefits of sponsorships for companies, particularly debated after this year’s World Cup. How will P&G make the Olympics sponsorship worth its considerable cost, and leverage it to accelerate growth in developing markets?
Marc Pritchard The reason we got into the Olympics is because it fits with our purpose, which is focused on touching more consumers’ lives in more parts of the world more completely. Today, we touch four billion consumers, and are on our way to five in the next five years. This [sponsorship] allows us to take all 38 of our categories and at least 50 of our largest brands, which cover most of our sales, everywhere in the world. It also gives us the opportunity to help extend our reach in places like China, Indonesia, Vietnam, India and Brazil.
The great thing about Asia is that it’s got half the world’s consumers and we see it as a real engine for growth. In India, we have launched seven new categories over the course of the last four years. The way to think about it is ‘per capita’. In the US, our sales per capita are US$100 per person. In China, where we are the number one company [they are] $3 per person and we are in about half the categories we compete in in the US. In Indonesia, Vietnam, Malaysia and Thailand, we’re in a half dozen of our categories and generating nice growth - sometimes up to 20 per cent growth. That shows the upside potential that we have in these markets, which we can reach through the Olympic sponsorship.
Atifa Silk How measurable are the rewards?
Marc Pritchard One of the reasons the sponsorship is so beneficial is that it not only helps us touch more consumers, but it’s good for business. In the 2008 Beijing Olympics, we sponsored gymnastics. But that was sponsorship on individual country bases. When the opportunity came up for a US sponsorship, we jumped on it and said let’s see if we can make this thing bigger. It was the first time - in the US at least - we used the P&G name as part of our programme.
It was at the Vancouver Winter Olympic Games we really demonstrated sponsorship could help us reach more people and generate sales. We had three elements to the sponsorship: The ‘Proud sponsor of moms’, which was our corporate idea; individual brands sponsoring athletes; and sponsorship of families with our ‘P&G family home’.
This helped us generate nearly $100 million of incremental sales in a fairly short period of time. It helped us get our highest market share in the US in the entire fiscal year to that point.
We generated more than six billion consumer impressions during this time frame. Three billion of them were in PR alone, a billion in digital and two billion in advertising. And, it made our advertising more effective. We found actual recall of liking our ads was 30 per cent to 37 per cent better [during the] Games than outside of the Games. It demonstrates you can have a purpose-inspired idea that also builds the business.
Atifa Silk What obstacles do you anticipate in tackling a sponsorship of this scale at such a large, multi-brand corporation?
Marc Pritchard Our strategy is really to work on it market by market so we’re here [in Singapore] doing a planning session for Asia. We have fixed elements of the sponsorship that everybody uses and elements that provide flexibility for individual markets.
Every country will have specific activities they can use and they can sponsor individual athletes that are particularly strong in the market. What really gives us unique ability within a market is our sponsorship of mothers. For example, for the Singapore Youth Olympic Games, we brought in 25 athletes’ mothers from around the world. Many parents aren’t able to go to the Olympics. So we help underwrite their costs to get there. In Vancouver we sent every mother of every Team USA athlete to the Games. There are some great stories we get this way.
It’s also important for us to work with retailers in local markets because every market will activate this sponsorship at the retail level in order to drive people in-store and be able to generate more sales. We did some great stuff with a lot of our retailers in Vancouver and they came up with themes themselves that brought the brands together.
Atifa Silk What are your expectations of your agencies as you tackle this sponsorship?
Marc Pritchard I’m looking for big ideas. I look to the agency to come up with the big ideas that can help our brands and bring the brands together. Literally every agency in our portfolio has a role because [of] the breadth of the brands we have and the number of agencies we work with. PR agencies, in particular, have a huge role to play in generating these stories and bringing them to life, so we will be expecting great coverage.
Atifa Silk What’s your digital and social media strategy for the Games?
Marc Pritchard Digital has a big role in our company. In fact, we think ‘digital’ as a description will go away because it is becoming so embedded in the way we operate. We’ve made a very big thrust in digital in the last couple of years and are connecting with consumers on a day-to-day basis. Obviously, search is important.
We think social media is another place where you can create communities around athletes and around the Games themselves. It was a big part [of] how we generated more fans for our brands during the whole [Vancouver] Winter Games. We had websites, which allowed people to get news on the Games and we will continue to do things like that so people can get up to speed, and work with our partners. We’ll see a lot more activity in mobile. In Asia, in particular, I see that mobile will be a critical part of how we connect with people.
Atifa Silk Digital has been a focus area for you at P&G. How much of your budget actually goes towards digital and mobile?
Marc Pritchard It’s definitely in the double digits in terms of spending. I’m finding increasingly that it’s the percentage of spend that’s less relevant because the numbers of impressions you can gain from digital are much greater.
It’s a bit like PR - you don’t spend a lot of money in PR, but you can get half your impressions in PR. You can spend double digits in digital but you can get 20 per cent to 40 per cent of impressions there. Increasingly that’s the way we’re monitoring programmes, too. We’re spending upfront with PR and digital and gaining impressions so that by the time you turn on traditional advertising and in-store, you’ve already generated a lot of impressions with people.
Atifa Silk Yet many other marketers have been slower on the uptake. What will it take for the broader industry to get serious about digital media?
Marc Pritchard The issue is people have grown up with mass marketing and that means broadcasting in order to gain awareness. What they have to think about with digital is that it’s actually the oldest form of marketing because it can be word-of-mouth. The difference is [through] technology [it] can be mass as well.
One of the mindset shifts we are helping people with is thinking about these areas for search and social media as networks by themselves. So you can run information, or you can run video and you can gain a lot of awareness that can then also generate a community that participates in your brand.
Old Spice is a great example. It generated 12 million hits at first on YouTube. Then it accelerated and got questions in from Twitter. It was huge. We had 100 million hits, and it just exploded. It really created a movement. When we get more examples like that, we’ll see acceleration to digital.
Atifa Silk The scale of complaints about Pampers Dry Max, which became a public-relations nightmare for you this year, was exaggerated because they were made on Facebook. How do you manage such negative sentiments on social media websites?
Marc Pritchard The thing to remember is that people have always talked about our brands — some great, some not so great. We just didn’t know about it. Well, now we know about it.
With the advent of social media, everybody has a microphone. So the way we deal with that is [the way] we deal with everything else: we care about what every consumer says. We want to make sure we understand what every consumer says. So, if there’s a social media situation where somebody is saying something negative, we’ll make sure we’re right there and talking with them. We monitor digital all the time and we can see whether something is starting to emerge as an issue. Then we can talk with people through our community managers.
By and large, what happens is if something is said that is not true, then the wisdom of the masses will correct it. So, when you look at it that way, scial media and the digital world has actually been more beneficial because we get a lot more advocates for our brands than we do detractors.
Atifa Silk What will be the next big thing in digital to impact marketing communications?
Marc Pritchard It’s going to be mobile and other types of more portable computers. The iPads and touch [technology] is going to turn things around. Mobile phones with the internet, which let people interact, will be huge. I think more and more brand builders will figure out how to do things like the Old Spice campaign. Or they’ll find connections that can create more participation and movement.
But I think digital is going to be like analogue – a technology description. People will start to think more about communications means as opposed to having explicit digital strategies. I think [digital] will become more pervasive in terms of how we operate and how we communicate with each other.
Atifa Silk What impact do you expect this to have on the way your agencies operate?
Marc Pritchard In many cases we will see digital agencies become embedded or integrated into communications agencies. It won’t be as separate as it is. I see a lot of that already – the seams breaking down between our agencies. In fact, we’re enabling some of that. For our top 50 brands, we have ‘Brand Franchise Leaders’. They’re global, but they are in every region. Asia is probably one of our best performing [areas] in terms of really embedding ‘Brand Franchise Leaders’.
They have a partner, a ‘Brand Agency Leader’ to coordinate all the agency work. So, we have one person who is on point to co-ordinate the advertising agency, the PR agency, the digital agency, the in-store agency, and the design agency. They’re a team and the benefit is integrated ideas from the very start [that] can quickly integrate around all touch points.
Atifa Silk Are there any ideas that you are proud of in the region, which are being exported to other markets?
Marc Pritchard One of the biggest ideas we have is on Pampers. It’s called ‘Golden sleep’. It started in China and the insight is that when a baby sleeps through the night, everybody’s day is better. That idea led to a brilliant campaign - TV; in-store displays; a website where mothers sent in pictures of their babies; a Guinness Book of World Records attempt - and it built the business. The idea was exported around the world and is now in its fourth year.
Gillette’s ‘To shave or not’ and ‘Women against lazy stubble’ is an idea being exported out of India. It combines digital and PR. Gillette created a participation movement through debates with celebrities, talkshows, and people online. That [has] built our business about 40 per cent a year for the last three years in India on Mach 3, a product that is 50 per cent more than the average price of products in this segment.
In Japan, they came up with an idea ‘I wish I could wash’ for Febreze, which is travelling around the world and building business by 20 per cent to 30 per cent everywhere. We’re seeing Pantene’s idea in Indonesia - ‘The three minute miracle’ - travel to Latin America. And India is pioneering the way we do trial, with smart programmes in schools. There’s a lot of good work coming out of the region. Asia is one of our top creative markets.
This article was originally published in the October 2010 issue of Campaign.