Tired of feeding an opaque, slimy industry of bots and fake clicks.
Procter & Gamble, one of the largest and most sophisticated advertisers in the world, reported on Thursday that sales were slightly down in the fourth quarter and for the fiscal year, despite consumer price inflation. It’s the epitome of corporate revenue stagnation: only price increases keep revenues from declining. An activist investor – formerly called ‘corporate raider’ – is breathing down its neck. So cost cutting to raise profits is the trick.
When a corporate giant cuts costs, it cuts the revenues of other companies.
And it did. Its ‘selling, general, and administrative expenses,’ which include advertising and marketing, fell 7% in the quarter. Net income jumped 12%. And digital advertising took it on the chin in P&G’s earnings report:
Digital ad spending was lower versus a high base period and due to current period choices to temporarily restrict spending in digital forums where our ads were not being placed according to our standards and specifications.
Back in the day before digital ads, advertisers lived by a rule of thumb: Half of our advertising doesn’t work and is wasted; we just don’t know which half.
This post was published at Wolf Street by Wolf Richter ‘ Jul 28, 2017.
Follow on Twitter
Recent Comments