P&G “embraces the evolution of markets toward eCommerce”. The big guns are boarding the eCommerce media train

[Updated: Sep 2020]


P&G is probably the world’s leading advertiser but it is also the company that points the way for others and where the likes of Procter & Gamble go, others soon follow.

In order for online retailers and marketplaces to fulfill the bright predictions of ecommerce media, P&G and the other big advertisers must jump on the bandwagon and lead the way.

In this post we will try to estimate how soon and how far they are going to go, starting with the present days and then traveling back in time until we reach 1930.


July 2020


“eCommerce sales were up 40% for the year, up 30% in the first half and 50% in the second half. Now over $7 billion in sales, over 10% of the company total…

P&G was just named the number one brand marketer of the decade at the Cannes Lions festival of creativity in June. Not only has our advertising been creative, it has been increasingly effective at growing markets and building our business. I’m particularly proud of this, as it speaks to sustained excellence versus a few great ads. In addition to winning with consumers communication, we need superior retail execution. Online and in physical stores, that contributes to the growth of categories in our brands.”

This is a quote from P&G last earning call held in July 2020.

There will another one soon…


Jan 2019


Here are some interesting sayings from P&G’s Q2 2018 earnings conference call that was held on Tuesday:

“Ecommerce sales continue to be very strong, growing about 40%. Last year P&G sales in ecommerce exceeded $3 billion. The goal this year is to build ecommerce sales to nearly $4.5 billion.”

When Jon Andersen from William Blair & Company asked: “what is it about the way you’re positioning your brands, the investments you’re making in non-tracked channels or the consumer within those channels that’s kind of enabling you to do that [building share disproportionately in non-tracked channels]?”, the answer was: “First as it relates to ecommerce, we’re building share broadly across our large markets in ecommerce and we’ve built share in 8 out of 10 categories in the last quarter. So that continues to grow disproportionately. I mentioned, I think in the prepared remarks for example Olay growing 80% in ecommerce in China for the quarter.”

So how exactly were they “building share in eCommerce”?


August 2017 – P&G’s August quarter end conference call.


In that call P&G talked thoroughly about these 2 things:

(1) Online shoppers don’t go further than the first one or two search result pages:

“…And we’ve talked often about endless shelf. If anything, online consumers look at less brands than more brands…Walk a store at a big mass merchandiser, and some big categories like hair care you may say, 30, 40, 50 brands. When you go to any one of the online opportunity sources, you’ll probably look at page one, maybe page two.”

(2) The importance of appearing in that first search result page with “a level of superiority. Because that then drives you to be getting both the discussion in social media as well as the movement that drives you up the various online companies’ algorithms…”

In other words, P&G make sure their products appear first.


August 2016


Let’s go back 12 months to P&G’s analyst call on August 2016.

Here is what they said back then about eCommerce:

“If I look at the top eight e-commerce markets for us in the world, it would be U.S., China, U.K., Germany, Japan, Korea, France, and India. On six of those eight we’re now growing share on e-commerce. And it’s because we have adjusted significantly to not see it as a separate activity but an integrated part of how we go and reach consumers when and where they’re receptive to shop.”

“We’re working very closely with any of the customers, whether they be bricks and mortars, omni-channel players, or the pure plays, to make sure that we have the portfolio and the communication that wins with them. And whether it is the big retailers in the U.S. or around the world, or whether it’s the pure plays on an Amazon, Jingdong, or Alibaba, in both we’re trying to ensure that we show up having consumer and shopper data that helps develop the category.”


P&G are not the only advertiser that understands the importance of showing up well in the eCommerce sites.

Here is what Jean-Paul Agon from L’Oreal said last year: “E-commerce isn’t the cherry on the cake, it’s the new cake … we have to see it as a new channel in which we want to take the lion’s share. And that’s what we are trying to do”.

Same goes for Kimberly-Clark (“Because e-commerce sites and the mobile web are where millennial moms often get their diapering information, Huggies is also stepping up digital content and advertising”) and for Unilever (“The lines between marketing and e-commerce are becoming blurred and building brilliant brand experiences is more critical today than ever. The shopping journey is no longer linear. We need to provide meaningful and frictionless experiences that resonate at any point in this journey … Our e-commerce business is well over a billion euros, growing at 40%. We are building our capability with e-retailers like Amazon, Ocado and Tencent and advancing our capabilities with different models.”).




Let’s go back 11 years to 2005.

P&G trembles the marketing industry introducing the FMOT – “First Moment of Truth” and saying that they will be shifting money from advertising to in-store promotions because they are looking to put their marketing spend into the media that offer the highest return on investment.

FMOT is the three to seven seconds when someone notices an item on a store shelf, an instant that is one of the most important marketing opportunities.

The company that popularized the concept of mass-market advertising was suddenly trying to push its brands directly to consumers where they’re most likely to be influenced: the store.

In-store marketing was not new but was something that the advertising world at large traditionally hasn’t paid a lot of attention to.

Marketing blogs and websites from around the world were filled with estimations and predictions how P&G’s focus on in-store promotions will turn rest of the industry in that direction.

And it did.

According to Google research in-store promotion was estimated a few year ago at 500 Billion dollars.




Let’s go Back to 1998.

“There really isn’t any other consumer goods company that touches the average family in as many ways, with as many trusted brands, as we do. Consequently, any medium that can help us deepen our bonds with those families and offer them new benefits is by definition of tremendous interest to us.”

This was the answer that Denis F. Beausejour, Vice President Advertising, Worldwide at Procter & Gamble, provided to the question “Why the web is right for P&G”, in his keynote talk during the Ad-Tech Conference held on May 1998.

At that time P&G were spending 3 million dollars a quarter on web advertising, 0.1% of P&G’s global advertising budget.

 p.s. This is a must read for all of you advertising history lovers. It’s a real gem.




Going back 2 years to the year 1996.

It has been 2 years since Hotwire started offering advertisers to place ads on it’s website for a flat fee of 30,000 dollars (for 12 weeks) and was soon followed by several other websites.

CPM is now the common practice for online campaigns and the total web ad spending is around 300 million dollars. Internet ad spending is so small that in ad spending reports it doesn’t even appear yet as a separate medium.

What did happen that year was that Yahoo!, the biggest portal at the time, allowed P&G to run campaigns based on clicks, instead of CPM’s or flat fees, leading the way for performance web advertising but also, more importantly, for the big budgets to start shifting online.

In other words P&G lead the way for performance based advertising.




Now let’s take a huge jump back to 1955.

80% of P&G advertising budget goes to television. 2 years earlier P&G invented the “soap opera” and 3 years earlier they were hardly spending anything on the new medium called television.

P&G learned the new medium, improved it to fit its needs and then shifted huge budgets in that direction.




Last jump takes us to 1935.

50% of P&G advertising budget goes to radio. 5 years earlier they weren’t spending anything on that new medium called radio.

Same as happened with TV 20 years later and with the Internet 45 years after that.

Give it a taste, enhance it, use it.


Back to 2020

“The need to be on the first and second page of the search, preferences large established superior brands, which we have. Again no guarantee of the future and no reason to rest. But we embrace the evolution of markets toward eCommerce.”

This was the 2nd quote from P&G earning call in July. Here comes the third:

“we’ve talked a lot about, and Marc Pritchard, our Chief Marketing Officer has talked a lot about externally is the opportunity to move what were historically a significant amount of non-working dollars into working in advertising and that’s been about a $1 billion shift and it continues.”

Where are these $1 billion shifting to??

Let’s jump back to things Marc Pritchard, P&G Chief Marketing Officer, said earlier (when their eCommerce sales were reaching only 3 billion dollars):

“We are working with e-commerce players like Amazon and Alibaba, to use unique ID data to reach consumers closer to when they’re ready to buy.

“This is accelerating our $3 billion e-commerce business and cutting waste by 20%,” he said. “But most important, it’s creating a better consumer ad experience.”



If there is something we have learned from P&G’s marketing activities in the last 80 years that can help us predict what will happen in the next 20 years when it comes to ecommerce media, it’s this:

  • They believe in strong in-store presence.
  • They believe in marketing channels with high ROI.
  • They believe in shifting non-working dollars into working dollars.
  • They believe that eCommerce media creates a good consumer ad experience.
  • They embrace new marketing channels and opportunities and they are ready to shift budgets accordingly and quickly.
  • They are marketing leaders and point the way for others.
  • They are generating a lot of revenue on eCommerce sites and it’s growing rapidly.
  • They have already started working closely with online retailers and running Sponsored Product campaigns in leading marketplaces.


So what will actually happen in the near future?

It seems very likely that P&G is driving and will continue to drive more and more of their advertising budget to eCommerce media and that this will be followed by the other big FMCG manufacturers so in 2-5 years it will become a very substantial medium.

In that sense the estimations and predictions that eCommerce media, led by Amazon, will become a several hundred billion dollar business are realistic.

The in-store battle for online shopper’s attention will be brutal, given that online shoppers usually don’t go further than the first result or category page and that there is limited shelf space in that 1st page.

The competition will increase the price brands are willing to pay for this promotion – as a result the PPC will surge and smaller brands and sellers will find themselves out of the game.

The one thing that is certain is that online retailers will generate much more revenues from Sponsored Product Ads and other in-store promotions.

Do you feel it coming now?



About Mabaya

Mabaya develops advertising tools that enable marketplaces and online retailers to monetize their traffic by offering sellers and brands to promote their products. Mabaya’s white label Sponsored Products Ads platform enables sellers and brands to bid in order to ensure their products are listed in premium locations in the online stores.