Digital Ad Kool-Aid

In the fourth quarter, the reduction in marketing that occurred was almost all in the digital space. And what it reflected was a choice to cut spending from a digital standpoint where it was ineffective: where either we were serving bots as opposed to human beings, or where the placement of ads was not facilitating the equity of our brands.

So P&G cut over $100 million out of its digital advertising spend in the fourth quarter, and this is what happened, according to Moeller: “We didn’t see a reduction in the growth rate.” And he added, “What that tells me is that that spending that we cut was largely ineffective.

Stories of brands cutting their digital ad spend are still few and far between. Facebook and Google have nothing to worry about as they both recently posted record sales and earnings. A majority of advertisers are still drinking the Digital Ad Kool-Aid.